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STANDARD BANK GROUP

Financial resultsfor the year ended 31 December 2018

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STANDARD BANK GROUP

Analysis of financial results

for the year ended 31 December 2018

Standard Bank Group is a leading African universal financial services group offering a full range of banking and related financial services • operates in 20 countries in sub-

Saharan Africa • owns a controlling interest in the

South African listed insurance and wealth management group, Liberty Holdings Limited (Liberty)

• three business segments: Personal & Business Banking, Corporate & Investment Banking and Liberty

• 157-year operating history in South Africa

• listed on the Johannesburg Stock Exchange (JSE) since 1970.

The Standard Bank Group’s (SBG or the group) analysis of financial results for the period ended 31 December 2018 has not been audited or independently reviewed.

The preparation of the financial results was supervised by the group financial director, Arno Daehnke BSc, MSc, PhD, MBA, AMP.

SEGMENTAL REPORTING

22 Segmental structure for key business units

24 Segmental income statement

26 Segmental statement of financial position

28 Personal & Business Banking

34 Corporate & Investment Banking

38 Liberty

GROUP RESULTS IN BRIEF

1 Highlights2 Financial results, ratios and

statistics3 Market and economic

indicators4 Overview of financial results9 Group income statement10 Headline earnings11 Headline earnings and

dividend per share 12 Movement in number of

ordinary and weighted average shares issued

13 Diluted headline earnings per share

14 Statement of financial position

16 Statement of comprehensive income

18 Statement of changes in equity

CONTENTS

KEY BANKING LEGAL ENTITY INFORMATION

THE STANDARD BANK OF SOUTH AFRICA72 Key financial results, ratios

and statistics74 Income statement75 Statement of financial

position76 Credit impairment charges78 Balance sheet impairment

roll forward for loans and advances

84 Loans and advances performance

86 Risk-weighted assets87 Capital adequacy88 Market share analysis

AFRICA REGIONS LEGAL ENTITIES90 Regional income statement93 Statement of financial

position

STANDARD BANK GROUP94 Headline earnings and net

asset value reconciliation by key legal entity

LIQUIDITY AND CAPITAL MANAGEMENT

62 Liquidity management64 Return on equity, cost of

equity and economic returns65 Currency translation effects

and economic capital66 Risk-weighted assets67 Return on risk-weighted

assets68 Capital adequacy70 Other capital instruments

FINANCIAL PERFORMANCE

42 Loans and advances43 Deposits and debt funding44 Banking activities average

balance sheet45 Net interest income and net

interest margin46 Non-interest revenue

analysis Credit impairment analysis48 Income statement

charges50 Balance sheet

impairment roll forward56 Loans and advances

performance58 Operating expenses60 Taxation

SHAREHOLDER INFORMATION

106 Analysis of shareholders107 Credit ratings108 Dividends and payment

datesibc Contact details

OTHER INFORMATION

96 Changes in accounting policies and restatements

102 Financial and other definitions

104 Abbreviations and acronyms

1 Following the adoption of IFRS 9 the group elected the South African Reserve Bank’s (SARB) three year phase-in provision in terms of its directive 5/2017 (SARB IFRS 9 phase-in provision). The ratio is reported after applying this phase-in provision. The fully loaded ratio is 13.1%, for further details please refer to page 69.

2 Refer to the IFRS 9-related accounting impact section on page 4 for more information regarding key IFRS 9 changes impacting these ratios. Comparatives are based on IAS 39.3 Restated. Refer to page 99.4 Compound annual growth rate.

The group adopted IFRS 9 with the exception of its hedge accounting requirements on 1 January 2018. The group has not, as permitted by IFRS 9, restated comparative results. The group also prepared an IFRS 9 Transition Report, on which a reasonable assurance audit opinion was provided by the group’s external auditors. A summary of that report has been summarised on pages 100 – 101. For further information, please refer to the report that is available on www.standardbank.com/reporting.

Highlights

7%

1 748 c

6%

27 865HEADLINE

EARNINGS2017: R26 270 million

Rm

7%

970 c

RETURN ON EQUITY

2017: 17.1%

18.0

57.0

(2.8)

0.56

COMMON EQUITY TIER

1 RATIO 1

2017: 13.5%

13.5HEADLINE

EARNINGS PER SHARE

2017: 1 640 cents

DIVIDEND PER

SHARE2017: 910 cents

JAWS 2

2017: 1.1% 3COST-TO- INCOME RATIO

2017: 55.5% 3

CREDIT LOSS

RATIO 2

2017: 0.87%

1

Headline earningsReturn on equity (ROE)

Headline earnings and return on equityCAGR4 (2013 – 2018): 10%

Rm %

2013 2014 2015 2016 2017 2018

16 986 17 137 22 187 23 009 26 270 27 865

14.2 13.0 15.6 15.3 17.1 18.0

0

4

8

12

16

20

0

6 000

12 000

18 000

24 000

30 000

Cents

Dividend per shareHeadline earnings per shareDividend payout ratio

2013 2014 2015 2016 2017 2018

533 598 674 780 910 970

1 084 1 081 1 389 1 440 1 640 1 748

49.2 55.3 48.5 54.2 55.5 55.5

Headline earnings and dividend per shareCAGR (2013 – 2018):

%

0

400

800

1 200

1 600

2 000

0

12

24

36

48

60

Dividend per share: 13%Headline earnings per share: 10%

1

Financial results, ratios and statistics

Change% 2018 20171

Standard Bank Group (SBG)Headline earnings contribution by business unit

Total headline earnings Rm 6 27 865 26 270

Banking activities Rm 7 25 847 24 268

Personal & Business Banking (PBB) Rm 10 15 548 14 103

Corporate & Investment Banking (CIB) Rm (2) 11 177 11 392

Central and other Rm (28) (878) (1 227)

Other banking interests Rm (26) 418 567

Liberty Rm 11 1 600 1 435

Ordinary shareholders' interest

Profit attributable to ordinary shareholders Rm 5 27 453 26 235

Ordinary shareholders' equity Rm 5 165 061 157 020

Share statistics

Headline earnings per ordinary share (EPS) cents 7 1 748.4 1 640.0

Diluted headline EPS cents 7 1 730.9 1 619.7

Basic EPS cents 5 1 722.6 1 637.8

Diluted EPS cents 5 1 705.3 1 617.5

Dividend per share cents 7 970.0 910.0

Net asset value per share cents 6 10 380 9 830

Tangible net asset value per share cents 6 8 891 8 369

Dividend payout ratio % 55.5 55.5

Dividend cover times 1.8 1.8

Number of ordinary shares in issue thousands (0) 1 590 217 1 597 371

Return ratios

Return on equity (ROE) % 18.0 17.1

Return on risk-weighted assets (RoRWA) % 3.0 3.1

Capital adequacy

Common equity tier 1 capital adequacy ratio2 % 13.5 13.5

Employee statistics

Number of employees (3) 53 178 54 558

Banking activitiesSelected ratios

ROE % 18.8 18.0

RoRWA % 2.9 2.9

Loan-to-deposit ratio % 81.7 83.3

Net interest margin % 4.58 4.74

Non-interest revenue to total income % 43.4 41.5

Credit loss ratio % 0.56 0.87

Jaws % (2.8) 1.1

Cost-to-income ratio % 57.0 55.5

Effective direct taxation rate % 21.3 22.0

Effective total taxation rate % 25.4 26.0

Employee statistics

Number of employees (2) 47 419 48 3221 Restated. Refer to page 99.2 Represents the ratio after applying the SARB phase-in provision for IFRS 9. Refer to page 69 for details regarding the fully loaded ratios.

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STANDARD BANK GROUP ANALYSIS OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 GROUP RESULTS IN BRIEF

Average Closing

Change% 2018 2017

Change% 2018 2017

Market indicators

SA prime overdraft rate % 10.08 10.39 10.25 10.25

SA SARB repo rate % 6.59 6.89 6.75 6.75

SA CPI % 4.7 5.3 4.5 4.7

JSE All Share Index 3 56 400 54 746 (12) 52 081 59 505

JSE Banks Index 21 9 327 7 692 (5) 9 162 9 619

SBK share price 23 193.32 156.63 (9) 178.81 195.66

Key exchange rates

USD/ZAR (1) 13.23 13.30 17 14.38 12.31

GBP/ZAR 3 17.63 17.13 11 18.31 16.55

ZAR/NGN1 5 27.15 25.79 (14) 25.01 29.19

ZAR/ARS 63 2.02 1.24 72 2.62 1.52

ZAR/KES (1) 7.66 7.77 (16) 7.08 8.39

ZAR/GHS 6 0.35 0.33 (8) 0.34 0.37

ZAR/UGX 4 281.70 271.55 (13) 258.20 295.86

ZAR/MZN (4) 4.56 4.76 (10) 4.28 4.75

ZAR/AOA 51 18.84 12.47 59 21.41 13.471 NAFEX rate introduced in April 2017.

JSE Banks IndexMSCI Emerging Markets IndexJSE All Share IndexStandard Bank

Share price performance (index)

120

110

100

90

80January 2018 December 2018

Market and economic indicators

3

Overview of financial results

Group resultsFor the year ended 31 December 2018 (2018), Standard Bank Group delivered sustainable earnings growth and improved returns. The group’s performance was underpinned by the strength and breadth of our client franchise. Group headline earnings grew 6% to R27.9 billion and ROE improved to 18.0% from 17.1% for the year ended 31 December 2017 (2017). The group’s capital position remained robust, with a common equity tier 1 (CET1) ratio of 13.5%. Accordingly, a final dividend of 540 cents per share has been declared, resulting in a total dividend of 970 cents per share, an increase of 7% on the prior year.

Banking activities headline earnings grew 7% to R25.8 billion and ROE improved to 18.8% from 18.0% in 2017. Non-interest revenue (NIR) continued to record strong growth, driven by retail banking. Net interest income (NII) growth was dampened, and credit impairment charges were lower, as a result of the adoption of a new accounting standard.

The 2018 group results were less impacted by currency movements than in prior years. On a constant currency basis, group headline earnings grew 8%. Africa Regions’ contribution to banking headline earnings grew to 31% from 28% in 2017. The top five contributors to Africa Regions’ headline earnings were Angola, Ghana, Mozambique, Nigeria and Uganda.

Operating environmentGlobal economic growth plateaued at 3.7% as geopolitical tensions rose and risk sentiment deteriorated. Growth trajectories de-coupled as fiscal stimulus in the US supported continued growth, whilst other advanced economies, in particular the Euro area, started to slow. Emerging market capital inflows reversed, which negatively impacted exchange rates and borrowing costs.

Economic growth in sub-Saharan Africa was 2.9%. In 1H18 inflation continued to ease, providing scope for interest rate cuts. By 2H18, heightened global risks resulted in a pause in monetary policy easing. Across our basket of currencies, exchange rates were relatively stable, other than in Angola where the Angolan Kwanza (AOA) devalued approximately 50% relative to the South African Rand (ZAR).

The economic recovery in the West Africa region was supported by buoyant growth in Côte d’Ivoire and Ghana and a recovery in Nigeria. In Angola, as the impacts of the currency devaluation in early 2018 moderated, inflation stabilised.

Kenya, Tanzania and Uganda all recorded real growth in excess of 5% in 2018. Private sector credit growth in Kenya remained below pre-rate cap levels. Uganda enjoyed robust growth in domestic demand, public infrastructure investment, agricultural productivity and a recovery in Foreign Direct Investment.

The countries neighbouring South Africa (SA) continued to feel the drag of SA’s poor economic environment, in particular Lesotho, Namibia and eSwatini. In Mozambique, despite the declining rates cycle, the operating environment remained difficult and lending activity remained subdued. Zimbabwe‘s challenges escalated in 3Q18, including acute currency shortages and inflationary pressures which drove weakened business confidence.

Growth in the SA economy was weaker than expected at 0.7%. The poor macro environment, slow policy progress and higher taxes weighed on consumer and business confidence and, in turn, demand for credit. A 25 basis point (bps) interest rate cut in March, on the back of broadly favourable conditions, was later reversed in November as the US fiscal tightening, oil price and exchange rate outlook were considered a threat to the South African Reserve Bank’s inflation targeting. The ZAR was relatively strong against the major currencies in 1H18, but this reversed in 2H18.

IFRS 9-related accounting impactFollowing the transition to IFRS 9, Standard Bank Group is required to suspend interest earlier which resulted in a R553 million reduction in NII and credit impairment charges in Personal & Business Banking South Africa (PBB SA). In addition, following a clarification from the IFRS Interpretations Committee in November 2018, the group is required to recognise previously unrecognised interest earned on loans which cured out of Stage 3 (otherwise referred to as released interest in suspense (IIS) on cured assets) as a reduction in credit impairment charges. Prior to 2018, IIS on cured assets was accounted for as interest income. The reclassification amounted to R1 169 million in 2018, of which R1 064 million related to PBB and R105 million related to Corporate & Investment Banking (CIB). The commentary below includes reference to the impact of these changes on net interest income, total income and credit impairment charges, as well as some of the group’s key ratios, namely net interest margin, credit loss ratio, cost-to-income ratio and jaws. There was no impact on 2018 headline earnings.

2018

IFRS 9-related

accounting impact

2018 adjusted 2017

2018 vs 2017

2018 adjusted vs 2017

Rbn Rbn Rbn Rbn % %

Net interest income 59.6 1.7 61.3 60.1 (1) 2

Non-interest revenue 45.7 45.7 42.6 7 7

Total income 105.3 1.7 107.0 102.7 3 4

Credit impairment charges (6.5) (1.7) (8.2) (9.4) (31) (13)

Operating expenses (60.1) (60.1) (57.0) 5 5

Headline earnings 27.9 27.9 26.3 6 6

Credit loss ratio (%) 0.56 0.71 0.87

Cost-to-income ratio (%) 57.0 56.1 55.5

Jaws (%) (2.8) (1.1) 1.1

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RevenueGroup revenue grew 3% and The Standard Bank of South Africa Limited’s (SBSA) revenue was flat. Adjusting for the IFRS 9-related accounting impact, group revenue grew 4% and SBSA, 2%. Africa Regions grew revenue 6%, 12% on a constant currency basis, reflective of the better economic environment and the underlying momentum in the franchise.

NII decreased 1% as margins declined 16 bps to 458 bps and average interest-earning assets grew 2.5% year on year. IFRS 9-related accounting impact accounted for 13 bps of the 16 bps decline. The impact of competitive pricing and demand for higher yielding deposit products in SA and negative endowment in Africa Regions was largely offset by strong growth in current and savings accounts (CASA) and a mix benefit as unsecured lending grew faster than asset-backed lending.

Non-interest revenue grew 7% supported by broad-based growth across all three underlying categories, namely net fee and commission revenue up 6%, trading revenue up 4% and other revenue up 11%.

In line with our customers’ increasing preference for convenient digital channels over traditional channels, electronic banking fee revenue increased 11% whilst revenue from account transaction fees increased at a slower rate of 2%. In SA, the business saw strong digital volume growth across Instant Money, the SBG mobile app and value-added services as well as card-based transactions. Digital adoption also continued to gain traction in Africa Regions, in particular, in Namibia, Nigeria and Zimbabwe. Knowledge-based fees grew 3%, following CIB’s participation in several landmark transactions, coupled with increased client activity in the Energy and Infrastructure sectors.

Equities provided an uplift in trading revenue, whilst the fixed income and currencies desks struggled against a high base in 2017. Other revenue was boosted by better bancassurance-related earnings and CIB’s portion of ICBC Standard Bank Plc’s (ICBCS) aluminium recovery which equated to R151 million. In line with IFRS 9, interest income on certain debt instruments is now recorded in other gains and losses on financial instruments.

Credit impairment chargesCredit impairment charges were R6.5 billion, 31% lower than the prior year, and the group credit loss ratio declined to 56 bps (2017: 87 bps). Adjusting for the IFRS 9-related accounting impact, the group credit loss ratio would have been 71 bps.

After adjusting for the IFRS 9-related accounting impact, PBB SA’s credit loss ratio decreased year on year, largely driven by higher post write-off recoveries, operational enhancements in customer credit ratings and continued improvements in collection processes. PBB Africa Regions also reflected improvements driven by improved risk performance, enhanced collection strategies and a lower provisioning requirement on highly collateralised non-performing loans.

CIB’s impairment charges declined 35% on the prior year and the credit loss ratio to customers declined to 20 bps (2017: 44 bps). Stage 3 credit impairment charges increased in SA, reflective of the difficult macro environment, but decreased in Africa Regions, driven by a recovery of a prior year impairment in Nigeria and improved credit risk management. CIB remains cautious on the outlook for the construction sector in SA and the consumer sectors in East Africa and SA.

Operating expensesOperating expenses growth of 5% should be considered relative to inflation in the underlying markets in which we operate, as well as the level of investment required to support our businesses’ growth. In 2018 we closed our core banking replacement programme, delivered a variety of digital enhancements and completed various regulatory, risk and compliance improvements. The group cost-to-income ratio for the year was 57% and after adjusting for IFRS 9-related accounting impact to revenue, it was 56%. SBSA costs grew 3%, down from 7% in 1H18.

Staff costs were up 7% driven by a combination of annual salary increases, separation costs relating to the IT restructure and key hires. Net headcount declined ~900 people on the back of a combination of natural attrition, digital efficiencies and management actions.

Ongoing prudent discretionary spend is reflected in other operating expenses growth of 4%. Tight control of IT expenses, in particular in 2H18, resulted in year-on-year growth of 5%. The increase in professional fees is attributable to specific projects related to customer experience in PBB and CIB as well as regulatory changes.

Loans and advances Gross loans and advances to customers grew 10% year on year, of which PBB’s advances to customers grew 7% and CIB’s, 13%. In line with underlying macros and strategy, Africa Regions recorded strong year-on-year loan portfolio growth of 31%. In SA, PBB disbursements grew across most products with particularly strong growth recorded by vehicle and asset finance (VAF) and personal unsecured lending.

Within PBB, the mortgage lending portfolio grew 4% driven by consistent quarter-on-quarter increases in disbursements, an increase in home loan registration values and a marginal slow-down in prepayments. The VAF lending portfolio grew 10%, driven by growth in SA, as the franchise turnaround started to gain traction. Personal unsecured lending and business lending both grew 14%. PBB Africa Regions loans to customers grew 22%.

Within CIB, Investment Banking (IB) grew 8%. IB originated over R167 billion of loans in the year across the Oil & Gas, Industrials, Consumer, Mining and Power & Infrastructure sectors, up from approximately R130 billion in the prior year. This is reflective of CIB’s broad client franchise and ongoing commitment to partnering their clients in their investment and expansion on the continent. The Africa Regions IB portfolio grew 28%, whilst South Africa IB grew a respectable 7% in a very slow environment. ZAR weakness in December 2018 inflated year-end balances. Corporate overdrafts

5

and trade finance facilities, reflected under Transactional products and services, grew 52% year on year but 15% on average. CIB funding provided to corporates through commercial paper issuances, qualifying as high-quality liquid assets (HQLA), is reflected as financial investments on the balance sheet. Underlying growth in CIB gross loans and advances to customers, including HQLA, was 15%. Loans to banks declined as liquidity raised in 2H17 was repaid.

Funding and liquidityThe group’s liquidity position remained strong and within approved risk appetite and tolerance limits. The group’s fourth quarter average Basel III liquidity coverage ratio amounted to 117%, exceeding the minimum phased-in regulatory requirement of 90%. The group maintained its net stable funding ratio in excess of the 100% regulatory requirement.

During 2018 the group raised R28.3 billion of longer term funding through a combination of negotiable certificates of deposit, senior debt and syndicated loans and R5.0 billion of Basel III compliant Tier II capital. The group will continue to monitor opportunities to issue senior unsecured and/or Tier II subordinated debt in the domestic and/or international markets, in order to optimise the group’s capital and funding position.

Deposits from customers grew R88.6 billion, equivalent to 8%, year on year, supported by 10% growth in PBB retail-priced deposits. Africa Regions recorded CASA inflows in Nigeria, Uganda, Zambia and Zimbabwe. Growth in customers drove increased deposits held in our offshore operations in the Isle of Man and Jersey.

CIB’s deposits and current accounts from customers grew 5% on the back of strong growth in call and current accounts, growing 19% and 20% respectively. The increase in deposits was driven by new clients in South Africa and across our Africa Regions franchise as well as increases in deposits from existing clients.

Capital managementThe group maintained strong capital adequacy ratios, with a CET1 ratio of 13.5% (2017: 13.5%) and a total capital adequacy ratio of 16.0% (2017: 16.0%). The group manages its capital levels to support business growth, maintain depositor and creditor confidence and create value for shareholders whilst ensuring regulatory compliance.

IFRS 9 became effective on 1 January 2018. The fully-loaded day one impact of implementing IFRS 9 was a 70 bps reduction in the group’s CET 1 ratio. After adjusting for the three year phase-in provision, the impact was reduced from 70 bps to 18 bps.


Gross loans and advances to customersChange 2018 2017

% Rm Rm

Personal & Business Banking 7 649 968 605 187

Mortgage loans 4 362 006 346 518

Vehicle and asset finance 10 89 410 81 640

Card debtors 3 33 216 32 268

Other loans and advances 14 165 336 144 761

Corporate & Investment Banking 13 398 425 352 190

Global markets 25 26 967 21 648

Investment banking 8 324 611 299 522

Transactional products and services 52 46 843 30 859

Real estate and PIM (98) 4 161

Central and other (61) (1 892) (4 841)

Gross loans and advances to customers 10 1 046 501 952 536

Deposits from customersChange 2018 2017

% Rm Rm


Retail priced deposits 10 467 989 426 484

Wholesale priced deposits 13 123 329 108 977


Central and other (15) (3 971) (4 671)

Deposits from customers 8 1 255 192 1 166 565

Comprising:Retail priced deposits and current accounts 10 467 989 426 484

Wholesale priced deposits 6 787 203 740 081

Deposits from customers 8 1 255 192 1 166 565

6


Overview of business unit performancePersonal & Business BankingPBB’s headline earnings grew 10% to R15.5 billion, underpinned by customer and balance sheet growth, higher transaction volumes and lower credit impairment charges. The impact of negative endowment, due to lower average rates in Malawi, Mozambique, Nigeria and SA, was offset by the benefit of stronger growth in higher margin lending products, combined with deposit growth outstripping loan growth. PBB jaws were negative 265 bps, however after adjusting for the IFRS 9-related accounting impact, jaws reduced to negative 26 bps. ROE improved to 21.9% from 20.0% in 2017.

Against a difficult macro and increasingly competitive environment, PBB SA delivered headline earnings of R13.7 billion, up 3%. Underlying revenue benefited from higher disbursements and better cross-sell following the embedding of all banking products into the frontline. PBB SA NII declined 1% and credit impairment charges were 28% lower, leading to a lower credit loss ratio of 83 bps (2017: 119 bps). After adjusting for IFRS 9-related accounting impact, the NII growth was 4%, credit impairment charges were 3% lower and the credit loss ratio was 112 bps. The favourable performance is attributed to improved collection strategies, higher post write-off recoveries and operational credit rating enhancements. This is partially offset by growth in stage 3 in mortgage loans, VAF and business lending given a protracted legal environment and business strain resulting from economic conditions.

Operating expenses were 6% higher as the franchise continued to invest in embedding the new operating model, improving the customer experience, staff re-skilling and upskilling and digitisation initiatives. The benefits of these investments are reflected in improving customer and employee NPS scores, a decline in the number of complaints and an acceleration in disbursements over the year.

Our customers continued to migrate to our digital platforms apace, in particular, the SBG mobile app. Digital transaction volumes increased 26%, whilst face-to-face volumes declined 13%. SBG mobile app users increased 30% to 1.3 million, mobile transaction values increased, 44% to 262 billion and transaction volumes increased, 50% to 958 million (over 2.5 million a day). Instant Money, our money transfer platform, also continued to gain traction; unique users increased 10% to 1.7 million. Our customers’ preference for digital channels is unequivocal. In order to deliver the always-on, always-secure offering they expect, we have to leverage the strategic IT assets we have, accelerate our product development and rollout and digitise our execution processes. This will require a reallocation of resources from our physical to our digital channels and a concomitant reconfiguration of our branch infrastructure.

PBB Africa Regions headline earnings grew more than threefold from R183 million in 2017 to R817 million in 2018.

The businesses in Angola, Ghana, Kenya, Uganda and Zambia grew market shares in both assets and deposits. Loans to customers increased 22% and deposits from customers grew 21%. The group’s market leading digital solutions assisted in driving customer growth. The number of active customers grew 11%. Transaction volumes increased 27% driven by digital transaction volumes which increased 34%, whilst branch transactions declined 12%. A growing customer base, combined with strong take up of mobile banking, resulted in a 90% increase in mobile banking transaction volumes year on year (2018: 52 million transactions).

Despite negative endowment, as rates fell in Malawi, Mozambique and Nigeria, net interest income grew 5% on the back of strong balance sheet growth, in particular CASA, and margin expansion. Non-interest revenue grew 13%, underpinned by an increase in the account base, higher transaction volumes, strong trade finance flows and growth in fees from our pension fund business in Nigeria. PBB Africa Regions contributed almost half of the Africa Regions legal entities’ total income. The credit loss ratio decreased to 138 bps from 247 bps in the prior year, reflective of improved book quality and improved collections as well as non-repeat of higher prior year charges in Nigeria and Malawi. Operating expenses grew 5%, delivering positive jaws of 336 bps and a decline in the cost-to-income ratio to 79% (2017: 82%).

Wealth International grew headline earnings 60% supported by growth in client deposit balances to GBP5.1 billion, increased client activity and endowment benefit.

Corporate & Investment BankingCIB’s headline earnings of R11.2 billion were down 2% on the prior year, and up 1% on a constant currency basis. Revenue from strong operational client activity in Africa Regions was offset by lower trading and capital markets related revenue linked to subdued market conditions. Declining interest rates in Africa Regions and competitive pricing in SA negatively impacted margins. Disciplined cost management constrained cost growth to 5% but was not sufficient to avoid negative jaws of 414 bps. Recognising the need to improve efficiency levels, CIB has initiated structural changes to change the cost base going forward. The credit loss ratio to customers declined to 20 bps due to a combination of improved performance and recoveries. Sovereign and financial institution ratings downgrades in early 2018 resulted in a higher capital demand, which negatively impacted return on risk weighted assets and ROE (2018: 19.3%).

CIB continued to grow and diversify its client base driving year-on-year client revenue growth of 8%. Client segments underpinning growth were multinationals and large domestic corporates and key sectors included Financial Institutions, Industrials and Power & Infrastructure. Africa Regions’ performance was underpinned by strong revenue growth in Angola, Kenya, Zambia and Zimbabwe.

Headline earnings by business unitCCY Change 2018 2017

% % Rm Rm

Personal & Business Banking 10 10 15 548 14 103

Corporate & Investment Banking 1 (2) 11 177 11 392

Central and other (32) (28) (878) (1 227)

Banking activities 8 7 25 847 24 268

Other banking interests (0) (26) 418 567

Liberty 11 11 1 600 1 435

Standard Bank Group 8 6 27 865 26 270

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Investment banking’s performance was underpinned by strong balance sheet growth, including corporate debt issuances and foreign currency loans to SA and African multinationals. Average loans increased 9% and margins were flat. Energy and Infrastructure transactions supported NIR. Credit impairment charges were lower year on year due to better portfolio performance and a recovery from a previously impaired exposure in Nigeria.

Transactional products and services continued to grow its Africa Regions client base and deposit base. Declining rates impacted NII whilst increases in trade and transaction activity supported NIR.

Global markets’ revenue was adversely impacted by negative emerging market sentiment and lower flows. CIB’s on-the-ground presence and deep local knowledge enables it to identify opportunities and trade even in dislocated markets.

Central and otherThis segment includes costs associated with corporate functions, as well as the group’s treasury and capital requirements, and central hedging activities. In 2018, the segment recorded a loss of R878 million, 28% less than the prior year. The primary driver of the higher loss in 2017 was the elimination, in terms of IFRS, of gains on SBK shares held by the group to facilitate client trading activities, which did not recur in 2018.

Other banking interestsOther banking interests recorded headline earnings of R418 million. ICBCS recorded growth in its underlying franchise revenue and a recovery of US$38 million relating to the aluminium previously written off. This was unfortunately offset by the trading business performance which was negatively impacted by declining global emerging market risk appetite and reduced flows, resulting in ICBCS recording a loss of US$14.9 million for the year. The group’s 40% share thereof equated to R74 million. ICBCS’s ability to deliver sustainable profits is dependent on its ability to continue to integrate into, and leverage, ICBC’s extensive client base. ICBCS did not require additional capital in 2018 on the back of lower than expected RWA growth. ICBCS’s business plan indicates the need for a capital injection of approximately US$200 million in the next 12 to 18 months, subject to RWA growth. The group’s share thereof would be US$80 million.

ICBC Argentina delivered a strong performance despite the dislocation experienced in the domestic market. The headline earnings contribution from the group’s 20% stake in ICBC Argentina increased 19% to R492 million. Adjusting for the significant devaluation of the Argentinian peso, earnings were up 95% on a constant currency basis year on year.

During 2019, we will continue to work with our strategic partners at ICBC to develop a lasting solution for these businesses.

LibertyThe financial results reported are the consolidated results of the group’s 56% investment in Liberty, adjusted for SBK shares held by Liberty for the benefit of Liberty policyholders which are deemed to be treasury shares in the group’s consolidated accounts.

Liberty’s operating earnings were up 42% on the prior year, driven by strong performances in Individual Arrangements and STANLIB. As is to be expected, given the negative trend in asset prices during

the year, Liberty’s shareholder investment portfolio was impacted by volatile market conditions resulting in lower market returns. We will continue to support Liberty as it executes its remedial and recovery plan and by continuing to deepen the collaboration between our businesses. Liberty’s IFRS headline earnings, after the adjustments for the impact of the BEE preference share income and the Liberty Two Degrees listed Real Estate Investment Trust accounting mismatch, declined to R2.6 billion from R3.3 billion in the prior year. Investors are referred to the full Liberty announcement dated 28 February 2019 for further detail.

Headline earnings attributable to the Standard Bank Group, adjusted by R129 million for the impact of deemed treasury shares, were R1.6 billion, 11% higher than in the prior year.

ProspectsGlobal growth is expected to weaken slightly in 2019 to 3.5% as the slowdown in momentum seen in 2H18 continues into 2019. With risks to the downside, economic conditions will remain challenging and volatile in 2019. Subdued demand will impact global trade, industrial production and could drive commodity and oil prices lower.

Whilst not immune from global risks, prospects for sub-Saharan Africa overall are good with growth expected to accelerate from 2.9% in 2018 to 3.5% in 2019. Over a third of the countries in the region are expected to grow above 5%.

With elections set for May 2019, South Africa is expected to be a tale of two halves. Subdued growth is anticipated in 1H19 as political and policy uncertainty continues to undermine confidence and delay investment and growth. An acceleration in 2H19 and into 2020, driven by corporate investment, whilst expected, will be dependent on the rate of policy progress, structural reform, broader economic stimulus and job creation. A return of stable electricity supply is critical. Assuming some progress and no further downgrades by rating agencies, we expect inflation to remain within the target range and interest rates to remain at current levels in 2019. This should support an uptick in growth to 1.3% for the year.

There is no doubt that in the years ahead the financial services industry, the competitive and regulatory environment and our customers’ and employees’ expectations will continue to change. Across the group, we are making the changes necessary to best position the franchise to deliver to all our stakeholders. We are focused on transforming our customer and employee experience and improving our productivity to deliver a “future-ready” group. In 2019, we will build on the franchise momentum from 2018, continue to simplify, rationalise and digitise and seek ways to accelerate our delivery.

We remain committed to our medium-term targets of delivering sustainable earnings growth and an ROE in our 18%-20% target range. Finally, in delivering on our purpose of driving Africa’s growth, we will continue to support faster, more inclusive and more sustainable growth and human development in South Africa and across the continent we are proud to call home.

Stakeholders should note that any forward-looking information in this announcement has not been reviewed and reported on by the group’s external auditors.


8


Group income statement

CCY Change 2018 20171

% % Rm Rm

Net interest income 1 (1) 59 622 60 125

Non-interest revenue 9 7 45 709 42 574

Net fee and commission revenue 7 6 30 375 28 670

Trading revenue 5 4 11 129 10 731

Other revenue 12 11 3 533 3 173

Other gains and losses on financial instruments2 100 100 672

Total income 4 3 105 331 102 699

Credit impairment charges (32) (31) (6 489) (9 410)

Loans and advances (34) (34) (6 211) (9 410)

Financial investments (100) (100) (101)

Letters of credit and guarantees and other (100) (100) (177)

Net income before operating expenses 8 6 98 842 93 289

Operating expenses 6 5 (60 084) (57 049)

Staff costs 8 7 (33 773) (31 672)

Other operating expenses 5 4 (26 311) (25 377)

Net income before non-trading and capital related items 9 7 38 758 36 240

Non-trading and capital related items >100 >100 (392) (97)

Net income before equity accounted earnings 9 6 38 366 36 143

Share of profit from associates and joint ventures 1 2 431 424

Profit before indirect taxation 9 6 38 797 36 567

Indirect taxation 9 9 (2 023) (1 849)

Profit before direct taxation 8 6 36 774 34 718

Direct taxation 0 2 (7 823) (7 644)

Profit for the year 10 7 28 951 27 074

Attributable to other equity instrument holders 24 24 (738) (594)

Attributable to non-controlling interests 4 20 (2 639) (2 206)

Attributable to ordinary shareholders - banking activities 7 5 25 574 24 274

Headline adjustable items - banking activities (>100) (>100) 273 (6)

Headline earnings - banking activities 8 7 25 847 24 268

Headline earnings - other banking interests (0) (26) 418 567

ICBCS (>100) (>100) (74) 152

ICBC Argentina 95 19 492 415

Headline earnings - Liberty 11 11 1 600 1 435

Standard Bank Group headline earnings 8 6 27 865 26 2701 Restated. Refer to page 99.2 For further information on Other gains and losses on financial instruments, refer to page 97.

9

Headline earnings

Reconciliation of profit for the period to group headline earnings2018 2017

Gross Tax1

NCI andother2 Net Gross Tax1

NCI andother2 Net

Rm Rm Rm Rm Rm Rm Rm Rm

Profit for the year - banking activities 36 774 (7 823) (3 377) 25 574 34 718 (7 644) (2 800) 24 274

Headline adjustable items - banking activities added/(reversed) 392 (122) 3 273 56 (66) 4 (6)

IAS 36 - Impairment of intangible assets 449 (123) 326 283 (78) 205

IAS 21 - Realised foreign currency profit on foreign operations (214) (214)

IAS 16 - (Gains)/losses on sale of properties and equipment (15) 2 3 (10) 10 (4) 4 10

IAS 28/IAS 36 - Impairment of associate 5 (1) 4

IAS 27/IAS 28 - (Gains)/losses on disposal of business (47) (47) 18 18

IAS 39 - Realised losses/(gains) on available-for-sale assets3 (41) 16 (25)

Headline earnings - banking activities 37 166 (7 945) (3 374) 25 847 34 774 (7 710) (2 796) 24 268

Headline earnings - other banking interests 418 418 567 567

Profit for the year - other banking interests 418 418 600 600

IAS 39 - Headline adjustable items: Realised gains on available-for-sale assets3 (33) (33)

Headline earnings - Liberty 4 795 (1 272) (1 923) 1 600 6 040 (2 863) (1 742) 1 435

Profit for the year - Liberty 4 546 (1 272) (1 813) 1 461 5 876 (2 835) (1 680) 1 361

IFRS 5 - Headline adjustable items: Impairment of non-current assets held for sale 249 (110) 139

IAS 36 - Headline adjustable items: Impairment of intangible assets 164 (28) (62) 74

Standard Bank Group headline earnings 42 379 (9 217) (5 297) 27 865 41 381 (10 573) (4 538) 26 2701 Direct taxation.2 Non-controlling interests and other equity instrument holders.3 Headline earnings Circular 4/2018 no longer excludes available for sale items from headline earnings and hence is not applicable from 1 January 2018.

Headline earnings CAGR (2013 – 2018): 10%

Rm

2013 2014 2015 2016 2017 2018

16 986 17 137 22 187 23 009 26 270 27 865

0

6 000

12 000

18 000

24 000

30 000

10


Headline earnings per shareCAGR (2013 – 2018): 10%

Cents

2013 2014 2015 2016 2017 2018

1 084 1 081 1 389 1 440 1 640 1 748

0

400

800

1 200

1 600

2 000

0

200

400

600

800

1 000

0

12

24

36

48

60

Dividend per share and payout ratioCAGR (2013 – 2018): 13%

Cents %

2013 2014 2015 2016 2017 2018

533 598 674 780 910 970

49.2 55.3 48.5 54.2 55.5 55.5

Dividend per shareDividend payout ratio

Headline earnings and dividend per share

Change% 2018 2017

Headline earnings Rm 6 27 865 26 270Headline EPS cents 7 1 748.4 1 640.0Basic EPS cents 5 1 722.6 1 637.8Total dividend per share cents 7 970.0 910.0Interim cents 8 430.0 400.0Final cents 6 540.0 510.0Dividend cover - based on headline EPS times 1.8 1.8Dividend payout ratio - based on headline EPS % 55.5 55.5

11

Movement in number of ordinary and weighted average shares issued

2018 2017

Issued number

of shares

Weighted number

of shares

Issued number

of shares

Weightednumber

of shares

000's 000's 000's 000's

Beginning of the year - IFRS shares 1 597 371 1 597 371 1 596 583 1 596 583

Shares in issue 1 619 268 1 619 268 1 618 421 1 618 421

Deemed treasury shares1 (21 897) (21 897) (21 838) (21 838)

Shares issued for equity compensation plans 1 730 950 2 878 1 296

Shares bought back (2 484) (1 518) (2 031) (1 172)

Movement in deemed treasury shares (6 400) (3 084) (59) 5 148

Share exposures held to facilitate client trading activities (4 727) (624) 6 549 6 288

Shares held for the benefit of Liberty policyholders (4 438) (4 033) (6 608) (1 140)

Shares held by Tutuwa SPEs 2 765 1 573

End of the year - IFRS shares 1 590 217 1 593 719 1 597 371 1 601 855

Shares in issue 1 618 514 1 618 700 1 619 268 1 618 545

Deemed treasury shares1 (28 297) (24 981) (21 897) (16 690)1 Includes shares held by Tutuwa Structured Entities, the group's share exposures held to facilitate client trading activities and for the benefit of Liberty policyholders.

12


Diluted headline earnings per share

Diluted headline earnings per shareCAGR (2013 – 2018): 10%

Cents

0

350

700

1 050

1 400

1 750

2013 2014 2015 2016 2017 2018

1 057 1 060 1 377 1 421 1 620 1 731

Change 2018 2017

% cents cents

Diluted headline EPS 7 1 730.9 1 619.7

Diluted EPS 5 1 705.3 1 617.5

Diluted weighted average number of ordinary shares issued2018 2017

000's 000's

Weighted average shares 1 593 719 1 601 855

Dilution from equity compensation plans 13 106 16 073

Group share incentive scheme 317 377

Equity growth scheme 2 302 4 436

Deferred bonus scheme, long-term incentive plans and related hedges 10 487 11 260

Tutuwa 3 076 3 993

Diluted weighted average shares 1 609 901 1 621 921

13

Statement of financial position

Banking activities Other banking interests and Liberty1 Standard Bank Group

CCY Change 2018 2017 CCY Change 2018 2017 CCY Change 2018 2017

% % Rm Rm % % Rm Rm % % Rm Rm

AssetsCash and balances with central banks 10 13 85 145 75 310 10 13 85 145 75 310

Derivative assets (34) (33) 48 429 72 629 9 9 3 249 2 981 (32) (32) 51 678 75 610

Trading assets 10 12 178 327 159 798 >100 >100 2 785 1 096 11 13 181 112 160 894

Pledged assets (22) (19) 7 218 8 879 6 6 12 661 11 906 (6) (4) 19 879 20 785

Financial investments 11 14 205 380 180 104 (3) (3) 342 025 353 210 2 3 547 405 533 314

Loans and advances 3 7 1 120 668 1 048 027 3 7 1 120 668 1 048 027

Loans and advances to banks (19) (6) 110 789 117 935 (19) (6) 110 789 117 935

Loans and advances to customers 6 9 1 009 879 930 092 6 9 1 009 879 930 092

Policyholders' assets (10) (10) 6 708 7 484 (10) (10) 6 708 7 484

Other assets (9) 19 17 531 14 768 (8) (8) 9 502 10 337 (8) 8 27 033 25 105

Interest in associates and joint ventures 17 17 2 122 1 816 3 5 8 254 7 849 5 7 10 376 9 665

Investment property 3 3 33 326 32 226 3 3 33 326 32 226

Property and equipment 18 22 16 509 13 539 2 2 2 685 2 640 16 19 19 194 16 179

Non-current assets held for sale 100 100 762 100 100 762

Goodwill and other intangible assets (2) (0) 23 006 23 098 >100 >100 670 231 (1) 1 23 676 23 329

Total assets 3 7 1 704 335 1 597 968 (2) (2) 422 627 429 960 2 5 2 126 962 2 027 928

Equity and liabilitiesEquity 0 5 163 429 155 233 2 2 35 634 34 784 0 5 199 063 190 017

Equity attributable to ordinary shareholders 0 5 146 360 138 808 2 3 18 701 18 212 0 5 165 061 157 020

Equity attributable to other equity holders2 0 0 9 047 9 047 0 0 9 047 9 047

Equity attributable to non-controlling interests 1 9 8 022 7 378 2 2 16 933 16 572 2 4 24 955 23 950

Liabilities 4 7 1 540 906 1 442 735 (2) (2) 386 993 395 176 2 5 1 927 899 1 837 911

Derivative liabilities (33) (33) 49 586 73 657 69 69 5 471 3 239 (29) (28) 55 057 76 896

Trading liabilities (4) (4) 61 267 63 577 83 83 (1 320) (722) (5) (5) 59 947 62 855

Deposits and debt funding 6 9 1 371 919 1 258 359 (0) (0) (14 382) (14 448) 6 9 1 357 537 1 243 911

Deposits from banks 4 27 116 727 91 794 (0) (0) (14 382) (14 448) 5 32 102 345 77 346

Deposits from customers 6 8 1 255 192 1 166 565 6 8 1 255 192 1 166 565

Policyholders' liabilities (4) (4) 310 994 322 918 (4) (4) 310 994 322 918

Non-current liabilities held for sale 100 100 237 100 100 237

Subordinated debt 8 10 20 819 18 966 4 4 5 540 5 323 7 9 26 359 24 289

Provisions and other liabilities 23 32 37 315 28 176 2 2 80 453 78 866 8 10 117 768 107 042

Total equity and liabilities 3 7 1 704 335 1 597 968 (2) (2) 422 627 429 960 2 5 2 126 962 2 027 9281 Includes adjustments on consolidation of Liberty into the group.2 Other equity holders of preference share capital and additional tier 1 capital.

14


Banking activities Other banking interests and Liberty1 Standard Bank Group

CCY Change 2018 2017 CCY Change 2018 2017 CCY Change 2018 2017

% % Rm Rm % % Rm Rm % % Rm Rm

AssetsCash and balances with central banks 10 13 85 145 75 310 10 13 85 145 75 310

Derivative assets (34) (33) 48 429 72 629 9 9 3 249 2 981 (32) (32) 51 678 75 610

Trading assets 10 12 178 327 159 798 >100 >100 2 785 1 096 11 13 181 112 160 894

Pledged assets (22) (19) 7 218 8 879 6 6 12 661 11 906 (6) (4) 19 879 20 785

Financial investments 11 14 205 380 180 104 (3) (3) 342 025 353 210 2 3 547 405 533 314

Loans and advances 3 7 1 120 668 1 048 027 3 7 1 120 668 1 048 027

Loans and advances to banks (19) (6) 110 789 117 935 (19) (6) 110 789 117 935

Loans and advances to customers 6 9 1 009 879 930 092 6 9 1 009 879 930 092

Policyholders' assets (10) (10) 6 708 7 484 (10) (10) 6 708 7 484

Other assets (9) 19 17 531 14 768 (8) (8) 9 502 10 337 (8) 8 27 033 25 105

Interest in associates and joint ventures 17 17 2 122 1 816 3 5 8 254 7 849 5 7 10 376 9 665

Investment property 3 3 33 326 32 226 3 3 33 326 32 226

Property and equipment 18 22 16 509 13 539 2 2 2 685 2 640 16 19 19 194 16 179

Non-current assets held for sale 100 100 762 100 100 762

Goodwill and other intangible assets (2) (0) 23 006 23 098 >100 >100 670 231 (1) 1 23 676 23 329

Total assets 3 7 1 704 335 1 597 968 (2) (2) 422 627 429 960 2 5 2 126 962 2 027 928

Equity and liabilitiesEquity 0 5 163 429 155 233 2 2 35 634 34 784 0 5 199 063 190 017

Equity attributable to ordinary shareholders 0 5 146 360 138 808 2 3 18 701 18 212 0 5 165 061 157 020

Equity attributable to other equity holders2 0 0 9 047 9 047 0 0 9 047 9 047

Equity attributable to non-controlling interests 1 9 8 022 7 378 2 2 16 933 16 572 2 4 24 955 23 950

Liabilities 4 7 1 540 906 1 442 735 (2) (2) 386 993 395 176 2 5 1 927 899 1 837 911

Derivative liabilities (33) (33) 49 586 73 657 69 69 5 471 3 239 (29) (28) 55 057 76 896

Trading liabilities (4) (4) 61 267 63 577 83 83 (1 320) (722) (5) (5) 59 947 62 855

Deposits and debt funding 6 9 1 371 919 1 258 359 (0) (0) (14 382) (14 448) 6 9 1 357 537 1 243 911

Deposits from banks 4 27 116 727 91 794 (0) (0) (14 382) (14 448) 5 32 102 345 77 346

Deposits from customers 6 8 1 255 192 1 166 565 6 8 1 255 192 1 166 565

Policyholders' liabilities (4) (4) 310 994 322 918 (4) (4) 310 994 322 918

Non-current liabilities held for sale 100 100 237 100 100 237

Subordinated debt 8 10 20 819 18 966 4 4 5 540 5 323 7 9 26 359 24 289

Provisions and other liabilities 23 32 37 315 28 176 2 2 80 453 78 866 8 10 117 768 107 042

Total equity and liabilities 3 7 1 704 335 1 597 968 (2) (2) 422 627 429 960 2 5 2 126 962 2 027 9281 Includes adjustments on consolidation of Liberty into the group.2 Other equity holders of preference share capital and additional tier 1 capital.

15

Statement of comprehensive income

2018 2017

Change

Ordinaryshareholders'

equity

Non-controlling

interests andother equityinstruments

Totalequity


equity

Non-controlling


Totalequity

% Rm Rm Rm Rm Rm Rm

Profit for the year 6 27 453 5 190 32 643 26 235 4 480 30 715

Other comprehensive income/(loss) after tax for the year 4 424 632 5 056 (4 721) (1 219) (5 940)

Items that may be subsequently reclassified to profit and loss 4 516 588 5 107 (4 450) (1 157) (5 607)

Movements in the cash flow hedging reserve (100) (8) (108) 136 21 157

Movement in debt instruments measured at fair value through other comprehensive income (OCI)1 59 (64) (5)

Movement in the available-for-sale revaluation reserve1 387 75 462

Exchange differences on translating foreign operations 4 557 660 5 217 (4 927) (1 253) (6 180)

Net change on hedges of net investments in foreign operations (46) (46)

Items that may not be subsequently reclassified to profit and loss (92) 44 (48) (271) (62) (333)

Total comprehensive income for the year 31 877 5 822 37 699 21 514 3 261 24 775

Attributable to ordinary shareholders 31 877 31 877 21 514 21 514

Attributable to other equity holders 738 738 594 594

Attributable to non-controlling interests 5 084 5 084 2 667 2 667

1 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. Therefore comparability will not be achieved by the fact that the comparative financial information has been prepared on an IAS 39 basis. Refer to page 96 for more detail on the adoption of IFRS 9.

16


2018 2017

Change


equity

Non-controlling


Totalequity


equity

Non-controlling


Totalequity

% Rm Rm Rm Rm Rm Rm

Profit for the year 6 27 453 5 190 32 643 26 235 4 480 30 715

Other comprehensive income/(loss) after tax for the year 4 424 632 5 056 (4 721) (1 219) (5 940)

Items that may be subsequently reclassified to profit and loss 4 516 588 5 107 (4 450) (1 157) (5 607)

Movements in the cash flow hedging reserve (100) (8) (108) 136 21 157

Movement in debt instruments measured at fair value through other comprehensive income (OCI)1 59 (64) (5)

Movement in the available-for-sale revaluation reserve1 387 75 462

Exchange differences on translating foreign operations 4 557 660 5 217 (4 927) (1 253) (6 180)

Net change on hedges of net investments in foreign operations (46) (46)

Items that may not be subsequently reclassified to profit and loss (92) 44 (48) (271) (62) (333)

Total comprehensive income for the year 31 877 5 822 37 699 21 514 3 261 24 775

Attributable to ordinary shareholders 31 877 31 877 21 514 21 514

Attributable to other equity holders 738 738 594 594

Attributable to non-controlling interests 5 084 5 084 2 667 2 667

1 The group has, as permitted by IFRS 9, elected not to restate its comparative financial statements. Therefore comparability will not be achieved by the fact that the comparative financial information has been prepared on an IAS 39 basis. Refer to page 96 for more detail on the adoption of IFRS 9.

17

Ordinary share

capital and premium

Empower-ment

reserveTreasury

shares

Foreign currency

translation reserve

Foreign currency

hedge of net

invest-ment

reserve

Cash flow hedging reserve

Regulatoryand

statutory credit risk

reserve

IAS 39 - Available-

for-sale revalu-

ation reserve

IFRS 9 -Fair value

throughOCI

reserve

Share-based

payment reserve

Other reserves

Retained earnings

Ordinary share-

holders’ equity

Otherequity instru-ments

Non-controlling

interestTotal

equity

Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm

Balance at 1 January 2017 17 960 (353) (268) (1 189) (937) (230) 3 073 206 (372) 253 132 614 150 757 5 503 23 099 179 359

Increase in statutory credit risk reserve 16 (16)

Transactions with non-controlling shareholders (8) (46) (54) 160 106

Equity-settled share-based payments 485 (1 370) (885) 29 (856)

Deferred tax on share-based payments 276 276 276

Transfer of vested equity options (1 019) 1 019

Net increase in treasury shares (758) (395) (1 153) (490) (1 643)

Net issue of share capital and share premium and other equity instruments 103 103 3 544 3 647

Unincorporated property partnerships capital reductions and distributions (151) (151)

Redemption of empowerment funding 14 14 14

Total comprehensive income for the year (4 927) (46) 136 387 (45) 26 009 21 514 594 2 667 24 775

Dividends paid (13 552) (13 552) (594) (1 364) (15 510)

Balance at 31 December 2017 18 063 (339) (1 034) (6 116) (983) (94) 3 089 593 (906) 208 144 539 157 020 9 047 23 950 190 017

IFRS 9 transition adjustment (948) (593) 582 (5 302) (6 261) (376) (6 637)

Balance at 1 January 2018 18 063 (339) (1 034) (6 116) (983) (94) 2 141 582 (906) 208 139 237 150 759 9 047 23 574 183 380

Increase in statutory credit risk reserve 1 296 (1 296)

Transactions with non-controlling shareholders (13) (241) 227 12 (1 594) (1 609) (1 386) (2 995)

Equity-settled share-based payments (1 078) 1 678 600 26 626

Deferred tax on share-based payments (128) (128) (128)

Transfer of vested equity options 959 (959)

Net increase in treasury shares (1 110) (185) (1 295) (412) (1 707)

Net issue of share capital and share premium and other equity instruments (203) (203) (203)



Other 35 35 16 51

Total comprehensive income for the year 4 557 (100) (71) 48 27 443 31 877 738 5 084 37 699

Dividends paid (15 113) (15 113) (738) (1 725) (17 576)

Balance at 31 December 2018 17 860 (201) (2 157) (1 800) (983) (194) 3 664 523 (1 025) 256 149 118 165 061 9 047 24 955 199 063

All balances are stated net of applicable tax.

Statement of changes in equity

18


Ordinary share

capital and premium

Empower-ment

reserveTreasury

shares

Foreign currency

translation reserve

Foreign currency

hedge of net

invest-ment

reserve

Cash flow hedging reserve

Regulatoryand

statutory credit risk

reserve

IAS 39 - Available-

for-sale revalu-

ation reserve

IFRS 9 -Fair value

throughOCI

reserve

Share-based

payment reserve

Other reserves

Retained earnings

Ordinary share-

holders’ equity

Otherequity instru-ments

Non-controlling

interestTotal

equity

Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm

Balance at 1 January 2017 17 960 (353) (268) (1 189) (937) (230) 3 073 206 (372) 253 132 614 150 757 5 503 23 099 179 359

Increase in statutory credit risk reserve 16 (16)

Transactions with non-controlling shareholders (8) (46) (54) 160 106

Equity-settled share-based payments 485 (1 370) (885) 29 (856)

Deferred tax on share-based payments 276 276 276

Transfer of vested equity options (1 019) 1 019

Net increase in treasury shares (758) (395) (1 153) (490) (1 643)

Net issue of share capital and share premium and other equity instruments 103 103 3 544 3 647



Total comprehensive income for the year (4 927) (46) 136 387 (45) 26 009 21 514 594 2 667 24 775

Dividends paid (13 552) (13 552) (594) (1 364) (15 510)

Balance at 31 December 2017 18 063 (339) (1 034) (6 116) (983) (94) 3 089 593 (906) 208 144 539 157 020 9 047 23 950 190 017

IFRS 9 transition adjustment (948) (593) 582 (5 302) (6 261) (376) (6 637)

Balance at 1 January 2018 18 063 (339) (1 034) (6 116) (983) (94) 2 141 582 (906) 208 139 237 150 759 9 047 23 574 183 380

Increase in statutory credit risk reserve 1 296 (1 296)

Transactions with non-controlling shareholders (13) (241) 227 12 (1 594) (1 609) (1 386) (2 995)

Equity-settled share-based payments (1 078) 1 678 600 26 626

Deferred tax on share-based payments (128) (128) (128)

Transfer of vested equity options 959 (959)

Net increase in treasury shares (1 110) (185) (1 295) (412) (1 707)

Net issue of share capital and share premium and other equity instruments (203) (203) (203)



Other 35 35 16 51

Total comprehensive income for the year 4 557 (100) (71) 48 27 443 31 877 738 5 084 37 699

Dividends paid (15 113) (15 113) (738) (1 725) (17 576)

Balance at 31 December 2018 17 860 (201) (2 157) (1 800) (983) (194) 3 664 523 (1 025) 256 149 118 165 061 9 047 24 955 199 063

All balances are stated net of applicable tax.

19

Notes

20


21

SEGMENTAL REPORTING 22 Segmental structure for key business units

24 Segmental income statement

26 Segmental statement of financial position

28 Personal & Business Banking

34 Corporate & Investment Banking

38 Liberty

Segmental structure for key business units

Banking and other financial services to individual customers and small-to medium-sized enterprises in South Africa, the Africa Regions and the Channel Islands. We enable customers to take control of all their financial aspects such as transacting, saving, borrowing or planning by making use of the following product sets either through face-to-face interaction or digitally according to their preference

What we offerTransactional productsComprehensive suite of transactional, saving, investment, trade, foreign exchange, payment and liquidity management solutions made accessible through a range of physical and electronic channels

Standard Bank Group

Banking activities

Personal & Business Banking

Corporate & Investment Banking

Mortgage lendingResidential accommodation loans mainly to personal market customers

Card products�� Credit card facilities to individuals and

businesses (credit card issuing)�� Merchant transaction acquiring services

(merchant solutions)

Vehicle and asset finance�� Finance of vehicles for retail market

customers�� Finance of vehicles and equipment in the

business and corporate assets market�� Fleet solutions

Lending products�� Lending products offered to both personal

and business markets�� Business lending offerings constitute a

comprehensive suite of lending product offerings, structured working capital finance solutions, commercial property finance solutions and trade finance

Wealth�� Short- and long-term insurance products

comprising: – simple products including loan protection

plans sold in conjunction with related banking products, homeowners’ insurance, funeral cover, household contents and vehicle insurance

– complex insurance products including life, disability and investment policies sold by qualified intermediaries

�� Financial planning and modelling�� Integrated fiduciary services including

fiduciary advice, will drafting and custody services as well as trust and estates administration �� Tailored banking, wealth management,

investment and advisory services solutions for high net worth individuals�� Offshore financial services to high net

worth, mass-affluent and corporate clients of the Group�� Investment services including global asset

management

Corporate and investment banking services to clients including governments, parastatals, larger corporates, financial institutions and multinational corporates

What we offerClient coverageProvide in-depth sector expertise to develop relevant client solutions and foster client relationships

Global marketsTrading and risk management solutions across financial markets, including foreign exchange, money markets, interest rates, equities, credit and commodities

Transactional products and servicesComprehensive suite of cash management, international trade finance, working capital and investor service solutions

Investment bankingFull suite of advisory and financing solutions, from term lending to structured and specialised products across the equity and debt capital markets

Central and other

Life insurance and investment management activities of the group companies in the Liberty Holdings Group

What we offerSouth Africa retailInsurance and investment solutions to individual mass-affluent and affluent consumers, mainly in South Africa

Business developmentInsurance and investment solutions to corporate customers and retirement funds across sub-Saharan Africa

Asset managementAsset management capabilities to manage investment assets on the African continent

Other banking interests

�� Equity investments held in terms of strategic partnership agreements with ICBC, including: – ICBC Standard Bank Plc (40% associate) – ICBC Argentina (20% associate)

�� Includes the costs of centralised corporate functions, with the direct costs of corporate functions recharged to the business segments

�� Includes the impact of the Tutuwa initiative, group hedging activities, group capital instruments, group surplus capital and strategic acquisitions

Liberty

22

STANDARD BANK GROUP ANALYSIS OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 SEGMENTAL REPORTING


2018 2017

Headline earnings Rm 15 548 14 103

Headline earnings contribution % 56 54

ROE % 21.9 20.0



Gross loans and advances to customers Rbn 650 605

Net loans and advances Rbn 674 629


2018 2017

Headline earnings Rm 11 177 11 392

Headline earnings contribution % 40 43

ROE % 19.3 22.0



Gross loans and advances to customers Rbn 398 352

Net loans and advances Rbn 503 467

Liberty

2018 2017

Normalised headline earnings as reported by Liberty Rm 2 256 2 719

IFRS headline earnings attributable to the group Rm 1 600 1 435

IFRS headline earnings contribution % 6 5

ROE1 % 15.2 12.7

Value of new business Rm 371 233

Normalised group equity value Rbn 39 39

Third party funds under management Rbn 392 3851 As determined by consolidation of Liberty into SBG.

56

% of group headline earnings

40


6


23

Segmental income statement



Central and other

Banking activities

Other banking interests Liberty2 Standard Bank Group

Change 2018 2017 Change 2018 2017 Change 2018 2017 Change 2018 20171 Change 2018 2017 Change 2018 2017 Change 2018 2017

% Rm Rm % Rm Rm % Rm Rm % Rm Rm % Rm Rm % Rm Rm % Rm Rm

Income from banking activities 3 69 807 67 708 1 36 981 36 770 (18) (1 457) (1 779) 3 105 331 102 699 3 105 331 102 699

Net interest income 2 41 754 40 963 (6) 19 190 20 434 4 (1 322) (1 272) (1) 59 622 60 125 (1) 59 622 60 125

Non-interest revenue 5 28 053 26 745 9 17 791 16 336 (73) (135) (507) 7 45 709 42 574 7 45 709 42 574

Net fee and commission revenue 6 25 020 23 698 5 5 688 5 437 (28) (333) (465) 6 30 375 28 670 6 30 375 28 670

Trading revenue (57) 174 402 3 10 880 10 548 (>100) 75 (219) 4 11 129 10 731 4 11 129 10 731

Other revenue 8 2 867 2 645 63 573 351 (47) 93 177 11 3 533 3 173 11 3 533 3 173

Other gains and losses on financial instruments (100) (8) 100 650 100 30 100 672 100 672

Net income from investment management and life insurance activities (11) 21 722 24 394 (11) 21 722 24 394

Total income 3 69 807 67 708 1 36 981 36 770 (18) (1 457) (1 779) 3 105 331 102 699 (11) 21 722 24 394 (0) 127 053 127 093

Credit impairment charges (30) (5 440) (7 785) (35) (1 049) (1 625) (31) (6 489) (9 410) (31) (6 489) (9 410)

Loans and advances (30) (5 464) (7 785) (54) (747) (1 625) (34) (6 211) (9 410) (34) (6 211) (9 410)

Financial investments (100) (2) (100) (99) (100) (101) (100) (101)

Letters of credit and guarantees 100 26 (100) (203) (100) (177) (100) (177)

Income before operating expenses 7 64 367 59 923 2 35 932 35 145 (18) (1 457) (1 779) 6 98 842 93 289 (11) 21 722 24 394 2 120 564 117 683

Operating expenses in banking activities 6 (42 269) (39 972) 5 (19 979) (19 080) 8 2 164 2 003 5 (60 084) (57 049) 5 (60 084) (57 049)

Staff costs 8 (14 548) (13 469) 0 (7 002) (6 984) 9 (12 223) (11 219) 7 (33 773) (31 672) 7 (33 773) (31 672)

Other operating expenses 5 (27 721) (26 503) 7 (12 977) (12 096) 9 14 387 13 222 4 (26 311) (25 377) 4 (26 311) (25 377)

Operating expenses in insurance activities (8) (16 404) (17 800) (8) (16 404) (17 800)

Net income before non-trading and capital items, and equity accounted earnings 11 22 098 19 951 (1) 15 953 16 065 >100 707 224 7 38 758 36 240 (19) 5 318 6 594 3 44 076 42 834

Non-trading and capital related items (83) (22) (132) >100 (385) (78) (87) 15 113 >100 (392) (97) 52 (249) (164) >100 (641) (261)

Share of profit from associates and joint ventures 35 325 241 (44) 102 182 >100 4 1 2 431 424 (30) 418 600 (19) 63 78 (17) 912 1 102

Net income before indirect taxation 12 22 401 20 060 (3) 15 670 16 169 >100 726 338 6 38 797 36 567 (30) 418 600 (21) 5 132 6 508 2 44 347 43 675

Indirect taxation 9 (643) (590) 19 (282) (237) 7 (1 098) (1 022) 10 (2 023) (1 849) (7) (586) (632) 5 (2 609) (2 481)

Profit before direct taxation 12 21 758 19 470 (3) 15 388 15 932 (46) (372) (684) 6 36 774 34 718 (30) 418 600 (23) 4 546 5 876 1 41 738 41 194

Direct taxation 6 (5 535) (5 211) (9) (2 240) (2 454) (>100) (48) 21 2 (7 823) (7 644) (55) (1 272) (2 835) (13) (9 095) (10 479)

Profit for the year 14 16 223 14 259 (2) 13 148 13 478 (37) (420) (663) 7 28 951 27 074 (30) 418 600 8 3 274 3 041 6 32 643 30 715

Attributable to other equity instrument holders 71 (142) (83) 89 (144) (76) 4 (452) (435) 24 (738) (594) 24 (738) (594)

Attributable to non-controlling interests >100 (542) (153) 3 (2 104) (2 039) (>100) 7 (14) 20 (2 639) (2 206) 8 (1 813) (1 680) 15 (4 452) (3 886)

Attributable to ordinary shareholders 11 15 539 14 023 (4) 10 900 11 363 (22) (865) (1 112) 5 25 574 24 274 (30) 418 600 7 1 461 1 361 5 27 453 26 235

Headline adjustable items (89) 9 80 >100 277 29 (89) (13) (115) (>100) 273 (6) 100 (33) 87 139 74 >100 412 35

Headline earnings 10 15 548 14 103 (2) 11 177 11 392 (28) (878) (1 227) 7 25 847 24 268 (26) 418 567 11 1 600 1 435 6 27 865 26 270

Net interest margin (%) 5.99 6.16 2.87 3.13 4.58 4.74

Credit loss ratio (%) 0.81 1.20 0.16 0.34 0.56 0.87

Cost-to-income ratio (%) 60.6 59.0 54.0 51.9 57.0 55.5

Number of employees (2) 27 470 28 074 (1) 3 755 3 811 (1) 16 194 16 437 (2) 47 419 48 322 (8) 5 759 6 236 (3) 53 178 54 558

ROE (%) 21.9 20.0 19.3 22.0 (10.7) (10.1) 18.8 18.0 5.6 7.3 15.2 12.7 18.0 17.11 Restated. Refer to page 99.2 Includes adjustments on consolidation of Liberty into the group.

24




Central and other

Banking activities




Income from banking activities 3 69 807 67 708 1 36 981 36 770 (18) (1 457) (1 779) 3 105 331 102 699 3 105 331 102 699

Net interest income 2 41 754 40 963 (6) 19 190 20 434 4 (1 322) (1 272) (1) 59 622 60 125 (1) 59 622 60 125

Non-interest revenue 5 28 053 26 745 9 17 791 16 336 (73) (135) (507) 7 45 709 42 574 7 45 709 42 574

Net fee and commission revenue 6 25 020 23 698 5 5 688 5 437 (28) (333) (465) 6 30 375 28 670 6 30 375 28 670

Trading revenue (57) 174 402 3 10 880 10 548 (>100) 75 (219) 4 11 129 10 731 4 11 129 10 731

Other revenue 8 2 867 2 645 63 573 351 (47) 93 177 11 3 533 3 173 11 3 533 3 173

Other gains and losses on financial instruments (100) (8) 100 650 100 30 100 672 100 672

Net income from investment management and life insurance activities (11) 21 722 24 394 (11) 21 722 24 394

Total income 3 69 807 67 708 1 36 981 36 770 (18) (1 457) (1 779) 3 105 331 102 699 (11) 21 722 24 394 (0) 127 053 127 093

Credit impairment charges (30) (5 440) (7 785) (35) (1 049) (1 625) (31) (6 489) (9 410) (31) (6 489) (9 410)

Loans and advances (30) (5 464) (7 785) (54) (747) (1 625) (34) (6 211) (9 410) (34) (6 211) (9 410)

Financial investments (100) (2) (100) (99) (100) (101) (100) (101)

Letters of credit and guarantees 100 26 (100) (203) (100) (177) (100) (177)

Income before operating expenses 7 64 367 59 923 2 35 932 35 145 (18) (1 457) (1 779) 6 98 842 93 289 (11) 21 722 24 394 2 120 564 117 683

Operating expenses in banking activities 6 (42 269) (39 972) 5 (19 979) (19 080) 8 2 164 2 003 5 (60 084) (57 049) 5 (60 084) (57 049)

Staff costs 8 (14 548) (13 469) 0 (7 002) (6 984) 9 (12 223) (11 219) 7 (33 773) (31 672) 7 (33 773) (31 672)

Other operating expenses 5 (27 721) (26 503) 7 (12 977) (12 096) 9 14 387 13 222 4 (26 311) (25 377) 4 (26 311) (25 377)

Operating expenses in insurance activities (8) (16 404) (17 800) (8) (16 404) (17 800)

Net income before non-trading and capital items, and equity accounted earnings 11 22 098 19 951 (1) 15 953 16 065 >100 707 224 7 38 758 36 240 (19) 5 318 6 594 3 44 076 42 834

Non-trading and capital related items (83) (22) (132) >100 (385) (78) (87) 15 113 >100 (392) (97) 52 (249) (164) >100 (641) (261)

Share of profit from associates and joint ventures 35 325 241 (44) 102 182 >100 4 1 2 431 424 (30) 418 600 (19) 63 78 (17) 912 1 102

Net income before indirect taxation 12 22 401 20 060 (3) 15 670 16 169 >100 726 338 6 38 797 36 567 (30) 418 600 (21) 5 132 6 508 2 44 347 43 675

Indirect taxation 9 (643) (590) 19 (282) (237) 7 (1 098) (1 022) 10 (2 023) (1 849) (7) (586) (632) 5 (2 609) (2 481)

Profit before direct taxation 12 21 758 19 470 (3) 15 388 15 932 (46) (372) (684) 6 36 774 34 718 (30) 418 600 (23) 4 546 5 876 1 41 738 41 194

Direct taxation 6 (5 535) (5 211) (9) (2 240) (2 454) (>100) (48) 21 2 (7 823) (7 644) (55) (1 272) (2 835) (13) (9 095) (10 479)

Profit for the year 14 16 223 14 259 (2) 13 148 13 478 (37) (420) (663) 7 28 951 27 074 (30) 418 600 8 3 274 3 041 6 32 643 30 715

Attributable to other equity instrument holders 71 (142) (83) 89 (144) (76) 4 (452) (435) 24 (738) (594) 24 (738) (594)

Attributable to non-controlling interests >100 (542) (153) 3 (2 104) (2 039) (>100) 7 (14) 20 (2 639) (2 206) 8 (1 813) (1 680) 15 (4 452) (3 886)

Attributable to ordinary shareholders 11 15 539 14 023 (4) 10 900 11 363 (22) (865) (1 112) 5 25 574 24 274 (30) 418 600 7 1 461 1 361 5 27 453 26 235

Headline adjustable items (89) 9 80 >100 277 29 (89) (13) (115) (>100) 273 (6) 100 (33) 87 139 74 >100 412 35

Headline earnings 10 15 548 14 103 (2) 11 177 11 392 (28) (878) (1 227) 7 25 847 24 268 (26) 418 567 11 1 600 1 435 6 27 865 26 270

Net interest margin (%) 5.99 6.16 2.87 3.13 4.58 4.74

Credit loss ratio (%) 0.81 1.20 0.16 0.34 0.56 0.87

Cost-to-income ratio (%) 60.6 59.0 54.0 51.9 57.0 55.5

Number of employees (2) 27 470 28 074 (1) 3 755 3 811 (1) 16 194 16 437 (2) 47 419 48 322 (8) 5 759 6 236 (3) 53 178 54 558

ROE (%) 21.9 20.0 19.3 22.0 (10.7) (10.1) 18.8 18.0 5.6 7.3 15.2 12.7 18.0 17.11 Restated. Refer to page 99.2 Includes adjustments on consolidation of Liberty into the group.

25

Segmental statement of financial position



Central and other

Banking activities




AssetsCash and balances with central

banks >100 22 803 7 312 12 62 289 55 731 (100) 53 12 267 13 85 145 75 310 13 85 145 75 310

Financial investments, trading and pledged assets (4) 40 017 41 839 14 344 758 303 452 76 6 150 3 490 12 390 925 348 781 (2) 357 471 366 212 5 748 396 714 993

Loans and advances 7 673 716 629 380 8 502 639 467 130 15 (55 687) (48 483) 7 1 120 668 1 048 027 7 1 120 668 1 048 027

Loans and advances to banks 27 51 795 40 681 (6) 112 789 120 494 24 (53 795) (43 240) (6) 110 789 117 935 (6) 110 789 117 935

Loans and advances to customers 6 621 921 588 699 12 389 850 346 636 (64) (1 892) (5 243) 9 1 009 879 930 092 9 1 009 879 930 092

Derivative and other assets 23 9 879 8 015 (28) 57 109 79 636 >100 (1 028) (254) (25) 65 960 87 397 (4) 12 751 13 318 (22) 78 711 100 715

Policyholders' assets (10) 6 708 7 484 (10) 6 708 7 484

Investment property 3 33 326 32 226 3 33 326 32 226

Interest in associates and joint ventures 19 1 396 1 175 10 632 573 38 94 68 17 2 122 1 816 5 7 852 7 493 13 402 356 7 10 376 9 665

Property and equipment 48 6 677 4 522 (24) 185 243 10 9 647 8 774 22 16 509 13 539 2 2 685 2 640 19 19 194 16 179

Non-current assets held for sale 100 762 100 762

Goodwill and other intangible assets (1) 12 840 12 989 >100 3 127 570 (26) 7 039 9 539 (0) 23 006 23 098 >100 670 231 1 23 676 23 329

Total assets 9 767 328 705 232 7 970 739 907 335 >100 (33 732) (14 599) 7 1 704 335 1 597 968 5 7 852 7 493 (2) 414 775 422 467 5 2 126 962 2 027 928

Equity and liabilitiesEquity 4 77 141 74 436 7 68 087 63 353 4 18 201 17 444 5 163 429 155 233 5 7 852 7 493 2 27 782 27 291 5 199 063 190 017

Equity attributable to ordinary shareholders 3 73 246 71 042 9 61 690 56 787 4 11 424 10 979 5 146 360 138 808 5 7 852 7 493 1 10 849 10 719 5 165 061 157 020

Equity attributable to other equity holders 92 1 651 859 >100 1 733 833 (23) 5 663 7 355 0 9 047 9 047 0 9 047 9 047

Equity attributable to non-controlling interests (11) 2 244 2 535 (19) 4 664 5 733 (>100) 1 114 (890) 9 8 022 7 378 2 16 933 16 572 4 24 955 23 950

Liabilities 9 690 187 630 796 7 902 652 843 982 62 (51 933) (32 043) 7 1 540 906 1 442 735 (2) 386 993 395 176 5 1 927 899 1 837 911

Deposits and debt funding 10 591 553 537 038 9 835 773 768 413 18 (55 407) (47 092) 9 1 371 919 1 258 359 (0) (14 382) (14 448) 9 1 357 537 1 243 911

Deposits from banks (85) 235 1 577 27 167 928 132 638 21 (51 436) (42 421) 27 116 727 91 794 (0) (14 382) (14 448) 32 102 345 77 346

Deposits and current accounts from customers 10 591 318 535 461 5 667 845 635 775 (15) (3 971) (4 671) 8 1 255 192 1 166 565 8 1 255 192 1 166 565

Interdivisional funding/(lending) 11 79 509 71 634 1 (92 397) (91 719) (36) 12 888 20 085

Derivative, trading and other liabilities (29) 9 950 14 037 (6) 148 103 157 813 53 (9 885) (6 440) (10) 148 168 165 410 4 84 604 81 383 (6) 232 772 246 793

Policyholders' liabilities (4) 310 994 322 918 (4) 310 994 322 918

Non-current liabilities held for sale 100 237 100 237

Subordinated debt 13 9 175 8 087 18 11 173 9 475 (66) 471 1 404 10 20 819 18 966 4 5 540 5 323 9 26 359 24 289

Total equity and liabilities 9 767 328 705 232 7 970 739 907 335 >100 (33 732) (14 599) 7 1 704 335 1 597 968 5 7 852 7 493 (2) 414 775 422 467 5 2 126 962 2 027 928

Average gross loans and advances 5 676 627 647 320 (1) 470 076 476 468 (20) (33 294) (41 401) 3 1 113 409 1 082 387

Average interest earning assets 5 697 481 665 263 2 667 505 653 301 28 (64 544) (50 384) 3 1 300 442 1 268 180

Average ordinary shareholders' equity 1 70 958 70 213 12 58 038 51 926 (34) 8 183 12 356 2 137 179 134 495 (4) 7 439 7 754 (6) 10 519 11 279 1 155 137 153 528

1 Includes adjustments on consolidation of Liberty into the group.

26




Central and other

Banking activities




AssetsCash and balances with central

banks >100 22 803 7 312 12 62 289 55 731 (100) 53 12 267 13 85 145 75 310 13 85 145 75 310

Financial investments, trading and pledged assets (4) 40 017 41 839 14 344 758 303 452 76 6 150 3 490 12 390 925 348 781 (2) 357 471 366 212 5 748 396 714 993

Loans and advances 7 673 716 629 380 8 502 639 467 130 15 (55 687) (48 483) 7 1 120 668 1 048 027 7 1 120 668 1 048 027

Loans and advances to banks 27 51 795 40 681 (6) 112 789 120 494 24 (53 795) (43 240) (6) 110 789 117 935 (6) 110 789 117 935

Loans and advances to customers 6 621 921 588 699 12 389 850 346 636 (64) (1 892) (5 243) 9 1 009 879 930 092 9 1 009 879 930 092

Derivative and other assets 23 9 879 8 015 (28) 57 109 79 636 >100 (1 028) (254) (25) 65 960 87 397 (4) 12 751 13 318 (22) 78 711 100 715

Policyholders' assets (10) 6 708 7 484 (10) 6 708 7 484

Investment property 3 33 326 32 226 3 33 326 32 226

Interest in associates and joint ventures 19 1 396 1 175 10 632 573 38 94 68 17 2 122 1 816 5 7 852 7 493 13 402 356 7 10 376 9 665

Property and equipment 48 6 677 4 522 (24) 185 243 10 9 647 8 774 22 16 509 13 539 2 2 685 2 640 19 19 194 16 179

Non-current assets held for sale 100 762 100 762

Goodwill and other intangible assets (1) 12 840 12 989 >100 3 127 570 (26) 7 039 9 539 (0) 23 006 23 098 >100 670 231 1 23 676 23 329

Total assets 9 767 328 705 232 7 970 739 907 335 >100 (33 732) (14 599) 7 1 704 335 1 597 968 5 7 852 7 493 (2) 414 775 422 467 5 2 126 962 2 027 928

Equity and liabilitiesEquity 4 77 141 74 436 7 68 087 63 353 4 18 201 17 444 5 163 429 155 233 5 7 852 7 493 2 27 782 27 291 5 199 063 190 017

Equity attributable to ordinary shareholders 3 73 246 71 042 9 61 690 56 787 4 11 424 10 979 5 146 360 138 808 5 7 852 7 493 1 10 849 10 719 5 165 061 157 020

Equity attributable to other equity holders 92 1 651 859 >100 1 733 833 (23) 5 663 7 355 0 9 047 9 047 0 9 047 9 047

Equity attributable to non-controlling interests (11) 2 244 2 535 (19) 4 664 5 733 (>100) 1 114 (890) 9 8 022 7 378 2 16 933 16 572 4 24 955 23 950

Liabilities 9 690 187 630 796 7 902 652 843 982 62 (51 933) (32 043) 7 1 540 906 1 442 735 (2) 386 993 395 176 5 1 927 899 1 837 911

Deposits and debt funding 10 591 553 537 038 9 835 773 768 413 18 (55 407) (47 092) 9 1 371 919 1 258 359 (0) (14 382) (14 448) 9 1 357 537 1 243 911

Deposits from banks (85) 235 1 577 27 167 928 132 638 21 (51 436) (42 421) 27 116 727 91 794 (0) (14 382) (14 448) 32 102 345 77 346

Deposits and current accounts from customers 10 591 318 535 461 5 667 845 635 775 (15) (3 971) (4 671) 8 1 255 192 1 166 565 8 1 255 192 1 166 565

Interdivisional funding/(lending) 11 79 509 71 634 1 (92 397) (91 719) (36) 12 888 20 085

Derivative, trading and other liabilities (29) 9 950 14 037 (6) 148 103 157 813 53 (9 885) (6 440) (10) 148 168 165 410 4 84 604 81 383 (6) 232 772 246 793

Policyholders' liabilities (4) 310 994 322 918 (4) 310 994 322 918

Non-current liabilities held for sale 100 237 100 237

Subordinated debt 13 9 175 8 087 18 11 173 9 475 (66) 471 1 404 10 20 819 18 966 4 5 540 5 323 9 26 359 24 289

Total equity and liabilities 9 767 328 705 232 7 970 739 907 335 >100 (33 732) (14 599) 7 1 704 335 1 597 968 5 7 852 7 493 (2) 414 775 422 467 5 2 126 962 2 027 928

Average gross loans and advances 5 676 627 647 320 (1) 470 076 476 468 (20) (33 294) (41 401) 3 1 113 409 1 082 387

Average interest earning assets 5 697 481 665 263 2 667 505 653 301 28 (64 544) (50 384) 3 1 300 442 1 268 180

Average ordinary shareholders' equity 1 70 958 70 213 12 58 038 51 926 (34) 8 183 12 356 2 137 179 134 495 (4) 7 439 7 754 (6) 10 519 11 279 1 155 137 153 528

1 Includes adjustments on consolidation of Liberty into the group.

27



% % Rm Rm

Net interest income 3 2 41 754 40 963


Total income 4 3 69 807 67 708



Taxation 7 6 (6 178) (5 801)

Headline earnings 10 10 15 548 14 103

Headline earnings change % 10 10

Headline earnings contribution to the group % 56 54




Jaws % (2.6) 1.0


RoRWA % 3.9 3.7

ROE % 21.9 20.0


Favourable�� Net promoter scores continue to improve post the introduction of

the new client centric operating model which has also resulted in a lower number of complaints in South Africa.

�� Increase in number of active clients in Africa Regions, Wealth International as well as targeted segments in South Africa.

�� Strong trade finance revenue growth in Africa Regions.

�� Improvement in return on equity and sustained growth in return on risk-weighted assets.

�� Increase in disbursement levels across lending products, notably, VAF and personal unsecured lending.

�� Mix benefit as growth in higher margin products outpaced asset-backed lending.

�� Successful deployment of the SBSA virtual mobile network.

�� Migration of remaining retail transactional accounts to new core banking system which completes the program.

�� Material increase in Instant Money volumes.�� Wealth International benefited from good margin growth due to a

favourable change in balance sheet mix and upward lift in US and UK interest rates.

Adverse�� Margins negatively impacted by accounting standard changes,

exacerbated by competitive pressures across most products.

�� Negative endowment due to lower average interest rates in South Africa, Nigeria, Mozambique and Malawi.

�� Negative jaws and deteriorated cost-to-income ratio exacerbated by accounting standard changes.

�� Decline in transactional volumes from higher fee earning traditional platforms as customers shift to more convenient digital platforms.

Headline earningsCAGR (2013 – 2018): 13%

Rm

2013 2014 2015 2016 2017 2018

8 401 9 797 11 280 12 724 14 103 15 548

18.6 18.1 18.2 18.8 20.0 21.9

16 000

12 800

9 600

6 400

3 200

0

Headline earningsReturn on equity (ROE)

0

4.4

8.8

13.2

17.6

22.0

%

Cost-to-income ratio

%

2013 2014 2015 2016 2017 2018

60.5 59.6 60.3 60.1 59.0 60.6

0

13

26

39

52

65

28


External loans and advances by productCCY Change 2018 2017

% % Rm Rm

Loans and advances to banks 16 27 51 795 40 681

Loans and advances to customers 5 6 621 921 588 699


Mortgage loans 4 4 362 006 346 518

Vehicle and asset finance 9 10 89 410 81 640

Card debtors 3 3 33 216 32 268

Other loans and advances 11 14 165 336 144 761

Personal unsecured lending 12 14 59 459 52 016

Business and other lending 10 14 105 877 92 745

Credit impairments for loans and advances 68 70 (28 047) (16 488)

Credit impairments for stage 3 (non-performing) loans 43 45 (17 292) (11 943)

Credit impairments for stage 1 and 2 (performing) loans >100 >100 (10 755) (4 545)

Comprising:Net loans and advances 5 7 673 716 629 380

Gross loans and advances 7 9 701 763 645 868

Credit impairments 68 70 (28 047) (16 488)

Deposits by productCCY Change 2018 2017

% % Rm Rm

Wholesale priced call deposits 13 13 123 329 108 977

Retail priced deposits 6 10 467 989 426 484

Current accounts 7 9 158 891 145 684

Cash management deposits 13 13 35 320 31 151

Call deposits 1 8 132 756 123 414

Savings accounts 18 24 28 617 23 107

Term deposits 1 4 95 702 92 428

Other funding 55 56 16 703 10 700

Deposits from customers 7 10 591 318 535 461

Deposits from banks (86) (85) 235 1 577

Wholesale priced interdivisional funding 15 11 79 509 71 634

Total deposits 8 10 671 062 608 672

29

Key business statisticsChange

% 2018 2017

South AfricaMortgage lendingNew business disbursements Rm 5 44 458 42 381Number of loan applications received thousands (4) 207 215Average loan to value (LTV) of new business registered % 86 86Portfolio market share2 % 34.2 34.3New business referred by traditional mortgage originators % 54 47Vehicle and asset financeNew business disbursements Rm 23 39 134 31 921- motor Rm 28 30 934 24 146- non-motor Rm 5 8 200 7 775

Clients/customersActive clients/customers3 thousands (0) 8 077 8 091Transactional - targeted thousands 1 1 665 1 644Other thousands (1) 6 412 6 447UCount clients thousands 14 863 756Instant Money unique users - Clients with no other relationship thousands 10 1 677 1 519Mobile Banking active users - total thousands 9 1 811 1 657Mobile Banking active users - SBG mobile app thousands 30 1 274 982Client/customer activityInstant money transactional volumes thousands 29 22 637 17 567Instant money turnover Rm 40 16 474 11 763Mobile Banking transactional values Rm 44 262 321 181 871Increase in UCount redemptions % 41 50Points of representationBranches (2) 629 640ATMs and ANAs1 0 7 239 7 224ATMs and ANAs - Standard Bank owned (1) 5 494 5 550ATMs - non-Standard Bank owned 4 1 745 1 674

Africa Regions ClientsActive clients thousands 11 5 091 4 588Customer activityMobile Banking transactional volumes - total thousands 90 52 150 27 413Points of representationBranches4 (0) 571 572ATMs 13 2 082 1 839Change in the number of ATM transactions % 13 232 Residential mortgages only.3 In addition, a further 1.5m clients do not meet our active classification.4 Includes service centres, customer service trade points, agencies, in-store banking and “bank at work” sites.


1 Including auto money devices and Automatic Notes Acceptors (ANAs).

Points of representation

BranchesATMs1 – Standard Bank ownedATMs1 – non-Standard Bank owned

2013 2014 2015 2016 2017 2018

1 283 1 233 1 221 1 211 1 212 1 200

7 861 7 065 7 193 7 189 7 389 7 576

1 439 1 558 1 622 1 633 1 674 1 745

0

300

600

900

1 200

1 500

0

2 000

4 000

6 000

8 000

10 000

Retail and business bankingCommercial banking Wealth

20172018

201773

918

2018719

20

Headline earnings by market segment (%)

30


Summarised income statement by geography1

South Africa Africa Regions

CCY Change 2018 2017 CCY Change 2018 2017

% % Rm Rm % % Rm Rm

Net interest income (1) (1) 31 587 32 005 9 5 8 720 8 283

Non-interest revenue 4 4 20 696 19 950 17 13 6 644 5 899

Total income 1 1 52 283 51 955 12 8 15 364 14 182

Credit impairment charges (28) (28) (4 533) (6 308) (37) (39) (905) (1 481)

Operating expenses 6 6 (29 059) (27 486) 9 5 (12 177) (11 601)

Headline earnings 3 3 13 721 13 290 >100 >100 817 183

Credit loss ratio (%) 0.83 1.19 1.38 2.47

Cost-to-income ratio (%) 55.6 52.9 79.3 81.8

ROE (%) 25.6 24.5 6.4 1.5

Wealth International


% % Rm Rm

Net interest income >100 >100 1 447 675

Non-interest revenue (23) (20) 713 896

Total income 33 37 2 160 1 571

Credit impairment charges (>100) (>100) (2) 4

Operating expenses 13 17 (1 033) (885)

Headline earnings 56 60 1 010 630

Credit loss ratio (%) 0.00 (0.01)

Cost-to-income ratio (%) 47.8 56.3

ROE (%) 21.2 16.21 The impact of interest in suspense adjustments can be seen on page 33. This is mostly applicable to South Africa.

South AfricaAfrica RegionsInternational

0

16 000

32 000

48 000

64 000

80 000

Rm

■

■

■

PBB total income by geographyCAGR:

2013 2014 2015 2016 2017 2018

38 743 43 011 46 284 50 627 51 955 52 283

9 026 11 244 12 973 15 284 14 182 15 364

852 1 144 1 380 1 724 1 571 2 160

South Africa 6%Africa Regions 11%International 20%

31

Summarised income statement by productTransactional products Mortgage lending


% % Rm Rm % % Rm Rm

Net interest income 3 2 16 090 15 758 (2) (2) 7 951 8 110

Non-interest revenue 8 7 13 970 13 083 0 0 314 313

Total income 5 4 30 060 28 841 (2) (2) 8 265 8 423

Credit impairment charges (40) (40) (940) (1 571)


Headline earnings 2 2 4 299 4 222 8 8 3 588 3 326

Card products Vehicle and asset finance


% % Rm Rm % % Rm Rm

Net interest income (3) (3) 2 947 3 025 (4) (5) 2 936 3 080

Non-interest revenue 3 2 3 883 3 796 (4) (4) 698 725

Total income 1 0 6 830 6 821 (4) (4) 3 634 3 805

Credit impairment charges (30) (30) (960) (1 379) (9) (10) (789) (872)

Operating expenses 6 6 (3 424) (3 223) (7) (7) (2 112) (2 283)

Headline earnings 11 11 1 706 1 541 1 2 517 506

Lending products Wealth


% % Rm Rm % % Rm Rm

Net interest income (0) (1) 9 597 9 689 70 72 2 233 1 301


Total income 0 (0) 12 079 12 135 17 16 8 939 7 683

Credit impairment charges (30) (31) (2 746) (3 960) 67 67 (5) (3)




Transactional productsMortgage lendingCard productsVehicle and asset financeLending productsWealth

20173023114

1418

20182823113

1520

PBB composition of headline earnings by product (%)

20172018

50.333mm

Transactional productsMortgage lendingCard productsVehicle and asset financeLending productsWealth

2017431210

61811

2018431210

51713

PBB composition of total income by product (%)

20172018

32


Interest in suspense adjustment�� NII has been negatively impacted across the various lending

products by the introduction of interest in suspense on pre-legal balances alongside the reallocation of released interest in suspense on cured debt. These adjustments lowered credit impairments and adversely impacted reported year-on-year NII growth.

Transactional products�� Good deposit growth following fixed deposit campaigns in the latter

part of 2017, combined with an increasing client base in Africa Regions.

�� Negative endowment due to lower average interest rates in South Africa, Nigeria, Mozambique and Malawi.

�� Fee income increased from annual price increases, partly offset by lower transactional volumes on traditional platforms as clients increasingly transact on more convenient digital platforms.

Mortgage lending�� Growth in book balance supported by higher registrations.

�� NII was supported by robust book growth in a sluggish property market.

�� Margins on new business contracted slightly due to the increased competitive pressures and funding costs.

�� Older, lower margin portfolio run-off supported the portfolio margin.

�� Stage 3 credit impairments growth was as a consequence of the protracted legal environment, and higher provisioning resulted from lower cures and model enhancements.

Card products�� NII was impacted by muted growth in interest-earning assets on the

back of a declining account base.

�� Higher interchange income resulting from higher turnover. Partly offset by the contraction of merchant acquiring margins.

�� Increased transaction volumes and higher turnover driven by additional point of sales device in Zimbabwe stemming from cash shortages.

�� Enhanced collection strategies combined with improved customer performance has resulted in improved quality portfolio.

�� Increased volume driven fees paid to card associations.

�� A decline in operational risk losses despite an increase in trading activities.

Vehicle and asset finance�� Good relationship with dealers led to large increase in payouts,

despite lacklustre industry growth.

�� High portfolio amortisation.

�� Lower new business pricing due to competitive market pressure which also negatively impacted portfolio margin.

�� Lower credit impairments mainly related to the non-repetition of provisions raised on larger single exposures in the prior year, lower write-offs and higher post write-off recoveries.

�� Operational efficiencies through co-locating teams and improvement of internal processes led to lower costs compared to prior year.

Lending products�� Increased balances, supported by higher new business disbursements

and increased limit utilisation.

�� Higher amortisation rates.

�� Margins impacted by competitive environment.

�� Continued focus on trade activities resulted in an increase in trade finance revenue in Africa Regions.

�� Credit impairments were reduced by higher post write-off recoveries in South Africa, improved operational processes to better rate credit risk on larger exposures, as well as enhancements to the public sector provisioning methodology.

Wealth�� Wealth International delivered strong growth as a result of higher

deposit growth, increased client activity and endowment benefit.

�� Sustained growth in the Nigerian wealth businesses’ assets under management.

�� Continued diversification in the Wealth business in Africa Regions.

�� Wealth and Investment continues to grow its client base which resulted in deposit and lending growth.

�� Continued focus on increasing revenue from insurance brokerage services in South Africa and Africa Regions.

�� Revenue pressures in the investment business as a result of subdued equity markets in South Africa.

Personal & Business Banking reportedPersonal & Business Banking adjusted for

IFRS 9-related accounting impact


% % Rm Rm % % Rm Rm

Net interest income 3 2 41 754 40 963 7 6 43 371 40 963


Total income 4 3 69 807 67 708 6 5 71 424 67 708

Credit impairment charges (30) (30) (5 440) (7 785) (9) (9) (7 057) (7 785)



Credit loss ratio (%) 0.81 1.20 1.05 1.20

Cost-to-income ratio (%) 60.6 59.0 59.2 59.0

Jaws (%) (2.6) 1.0 (0.3) 1.0

33



% % Rm Rm

Net interest income (2) (6) 19 190 20 434


Total income 3 1 36 981 36 770



Taxation (3) (6) (2 522) (2 691)

Headline earnings 1 (2) 11 177 11 392

Headline earnings change % (2) 11

Headline earnings contribution to the group % 40 43



Credit loss ratio to customers % 0.20 0.44


Jaws % (4.1) 4.6


RoRWA % 2.5 2.9

ROE % 19.3 22.0


Favourable�� Strong client activity in Africa Regions, specifically in West Africa and

South & Central Africa, led by multinationals and large domestic clients.

�� Diversified and sustained client revenue growth from Financial Institutions, Industrials and Power & Infrastructure sectors.

�� Loans and advances growth supported by client franchise growth.

�� Prudent and responsive risk management evidenced by the material recovery of a previously impaired name which cured.

�� Cost growth contained below the average weighted inflation of our key markets.

�� Structural cost reduction initiated to transform the cost base.

Adverse�� Low growth environment and geopolitical tensions impacted

corporate activities and capital flows in key markets resulting in low revenue growth.

�� Subdued trading activity and volumes in South Africa and margin compression impacted trading revenues in global markets.

�� Declining interest rate environment and foreign currency shortages in key African markets.

�� Increased capital utilisation as a result of portfolio rating downgrades at the end of 2017.

Cost-to-income ratio

%

2013 2014 2015 2016 2017 2018

58.2 53.7 55.8 54.5 51.9 54.0

30

36

42

48

54

60


Rm %

2013 2014 2015 2016 2017 2018

6 500 4 980 9 076 10 339 11 392 11 177

14.1 10.2 18.0 19.5 22.0 19.3

Headline earningsROE

2 800

5 040

7 280

9 520

11 760

14 000

0

5

10

15

20

25

34


External loans and advances by productCCY Change 2018 2017

% % Rm Rm

Gross loans and advances to banks (17) (6) 112 852 120 494

Credit impairments for banks (100) (100) (63)

Net loans and advances to banks (17) (6) 112 789 120 494

Gross loans and advances to customers incl. HQLA 11 15 412 163 357 960

Global markets 20 25 26 967 21 648

Investment banking 7 11 338 349 305 292

Customer lending qualifying as HQLA1 >100 >100 13 738 5 770

Other loans and advances to customers 5 8 324 611 299 522

Transactional products and services 42 52 46 843 30 859

Real estate and PIM (98) (98) 4 161

Less HQLA >100 >100 (13 738) (5 770)


Credit impairments for loans and advances 48 56 (8 575) (5 554)

Credit impairments for stage 3 (non-performing loans) 88 96 (6 509) (3 325)

Credit impairments for stage 1 and 2 (performing loans) (13) (7) (2 066) (2 229)

Net loans and advances to customers 12 12 389 850 346 636

Comprising:Net loans and advances 2 8 502 639 467 130

Gross loans and advances (0) 8 511 277 472 684


1 HQLA defined as high quality liquid assets

Deposits and debt funding by productCCY Change 2018 2017

% % Rm Rm



Call deposits 16 19 103 874 87 145

Term deposits 4 4 163 766 157 044

Negotiable certificates of deposit (10) (10) 125 184 139 834

Other funding 16 21 43 052 35 657

Deposits from customers 4 5 667 845 635 775

Interbank deposits 10 27 167 928 132 638

Interdivisional funding 3 1 (92 397) (91 719)

Total deposits and debt funding 6 10 743 376 676 694

35

Global marketsInvestment bankingTransactional products and servicesReal estate and PIM

2017402732

1

2018363231

1

CIB composition of headline earnings by product (%)

20172018

CIB composition of total income by product (%)

20172018

Global markets South AfricaGlobal markets Africa RegionsInvestment bankingTransactional products and services South AfricaTransactional products and services Africa Regions

201717212317

22

201816212417

22

Summarised income statement by productGlobal markets Investment banking


% % Rm Rm % % Rm Rm

Net interest income (7) (11) 4 074 4 584 (10) (10) 5 154 5 758


Total income 0 (2) 13 639 13 961 5 4 8 891 8 525

Credit impairment charges >100 >100 (37) (9) (53) (53) (658) (1 397)


Headline earnings (10) (12) 4 050 4 581 13 14 3 551 3 123

Transactional products and services Real estate and PIM


% % Rm Rm % % Rm Rm

Net interest income 4 (1) 9 944 10 085 >100 >100 18 7


Total income 6 1 14 282 14 190 80 80 169 94

Credit impairment charges 52 45 (288) (199) >100 >100 (66) (20)

Operating expenses 9 6 (8 268) (7 778) (77) (77) (15) (65)

Headline earnings 2 (5) 3 498 3 694 (>100) (>100) 78 (6)



% % Rm Rm

Net interest income (2) (6) 19 190 20 434


Total income 3 1 36 981 36 770



Headline earnings 1 (2) 11 177 11 392


36


Global markets�� Negative emerging markets sentiment adversely affected South

African equities and interest rate trading revenues.�� Net interest income impacted by declining interest rates in key

markets.�� Non-repeat of prior year gains made on a material market event

offset strong growth in West Africa trading revenues.

Investment banking�� Robust growth in average loans and advances, mainly to non-domestic

entities and through increased issuances of corporate debt securities (HQLA).

�� NII negatively impacted by changes to accounting treatment following the implementation of IFRS9.

�� Increase in fee and commission revenue supported by participation in several landmark transactions, coupled with increased client activity in the Energy and Infrastructure sectors.

�� An improved performance from the Africa Regions franchise driven by good growth in average loans.

�� Subdued mergers & acquisitions activity and fewer market issuances impacted the debt and equity capital business.

Global markets Investment bankingTransactional products and servicesReal estate and PIM

0

10 000

20 000

30 000

40 000

50 000

Rm

■

■

■

CIB total income by productCAGR: Global markets 7% Investment banking 5% Transactional products and services 10%

2013 2014 2015 2016 2017 2018

9 528 10 553 11 820 13 475 13 961 13 639

6 961 7 374 7 843 8 266 8 525 8 891

8 929 10 472 11 409 13 603 14 190 14 282

431 772 316 76 94 169

Transactional products and services�� Sustained revenue increase in East and West Africa through new

client acquisitions.

�� Continued growth in customer deposits in Africa Regions and increased activity in the trade business.

�� Declining interest rate environment resulted in reduced endowment.

37

Liberty

Favourable�� Growth in new business margin and value of new business supported

by the positive impacts of management initiatives, stringent cost management, modelling refinements and non-economic assumption changes. �� Marginal growth in indexed new business due to higher Liberty

Corporate single premium business offset by lower SA Retail recurring and single premium business in a tough consumer environment.�� Increased net cash inflows in long-term insurance operations

attributable to reduced net cash outflows in Liberty Corporate, partly offset by lower SA Retail net cash inflows mainly due to higher surrender and maturity claims.

Income statement, ratios and statistics as consolidated into SBGChange 2018 2017

% Rm Rm

Net insurance premiums1 Rm 1 38 521 38 020

Investment income and gains2 Rm (91) 3 533 40 274

Benefits due to policyholders and third party mutual fund interests1 Rm (52) 27 618 57 583

Operating expenses2 Rm (8) (16 404) (17 800)

Normalised operating earnings1 Rm 42 2 006 1 412

Normalised headline earnings1 Rm (17) 2 256 2 719

IFRS headline earnings1 Rm (19) 2 645 3 252

Headline earnings attributable to the group3 Rm 11 1 600 1 435

SBG share of Liberty's IFRS headline earnings Rm (18) 1 471 1 804

Group shares held for the benefit of Liberty policyholders Rm (>100) 129 (369)

Effective interest in Liberty at end of period % 56.0 55.5

ROE % 15.2 12.7

Normalised return on Liberty group equity value1,4 % 3.8 1.1

Indexed new business (excluding contractual increases)1 Rm 0 8 051 8 018

New business margin1 % 0.9 0.5

Net cash inflows in long-term insurance operations1 Rm 22 2 001 1 634

Value of new business1 Rm 59 371 233

Normalised group equity value1 Rm (2) 38 684 39 368

Solvency capital requirement coverage ratio1 times 1.871 Liberty as published.2 Includes an adjustment on consolidation of Liberty into the group.3 Includes an adjustment for group shares held for the benefit of Liberty policyholders (deemed treasury shares).4 Return embedded value.

�� The group remains well capitalised in respect of the new prudential regulatory regime, which became effective from 1 July 2018. The Solvency Capital Requirement Cover of Liberty Group Limited, the group’s main long-term insurance licence, of 1.87 times at 31 December 2018 is at the upper end of the target range.

Adverse�� The 3.8% annualised return on group equity value is below target

due to economic assumption changes and low investment returns in line with investment markets.

Headline earnings – SBG shareCAGR (2013 – 2018): (5%)

Rm %

Headline earningsROE

2013 2014 2015 2016 2017 2018

2 121 2 014 2 433 955 1 435 1 600

20.4 20.5 18.7 8.4 12.7 15.2

0

5

10

15

20

25

0

800

1 600

2 400

3 200

4 000

Normalised group equity valueCAGR (2013 – 2018): 1%

Rm

2013 2014 2015 2016 2017 2018

36 067 40 024 41 635 41 221 39 368 38 684

0

10 000

20 000

30 000

40 000

50 000

38


Income statement as reported by LibertyChange 2018 2017

% Rm Rm

Insurance premiums 2 40 611 39 970

Reinsurance premiums 7 (2 090) (1 950)

Net insurance premiums 1 38 521 38 020

Investment income and gains (81) 7 910 41 019

Revenue from contracts with customers 11 4 073 3 683

Total revenue (39) 50 504 82 722

Benefits due to policyholders and third party mutual fund interests (52) (27 618) (57 583)

Net insurance benefits and claims (40) (26 484) (43 848)

Fair value adjustment to policyholders' liabilities under investment contracts (>100) 1 273 (9 116)

Fair value adjustment third party mutual fund interests (48) (2 407) (4 619)

Income after policyholders' benefits (9) 22 886 25 139

Operating expenses (1) (18 372) (18 596)

Acquisition costs (11) (4 413) (4 935)

General marketing and administration expenses (1) (11 184) (11 345)

Finance costs and fair value adjustment to financial liabilities 11 (1 491) (1 344)

Profit share allocations 32 (1 284) (972)

Income before equity accounted earnings (31) 4 514 6 543

Non-trading and capital items (100) (249)

Share of profit from joint ventures 28 32 25

Profit before taxation (35) 4 297 6 568

Taxation (56) (1 255) (2 864)

Profit for the period (18) 3 042 3 704

Attributable to non-controlling interests1 10 (644) (586)

Attributable to preference shareholders 0 (2) (2)

Headline adjustable items 83 249 136

IFRS headline earnings (19) 2 645 3 252

BEE preference share income (20) 8 10

Accounting profit and loss mismatch arising on consolidation of Liberty Two Degrees (27) (397) (543)

Normalised headline earnings (17) 2 256 2 7191 Non-controlling interest within Liberty.

Long-term policyholder liabilitiesCAGR (2013 – 2018): 3%

Rbn

2013 2014 2015 2016 2017 2018

264 294 305 307 323 311

0

70

140

210

280

350

39

Headline earningsChange 2018 2017

% Rm Rm

South African Insurance operations 21 2 009 1 665

SA Retail (previously Individual Arrangements) 31 1 581 1 208

Liberty Corporate (36) 52 81

LibFin Markets 0 376 376

South Africa Asset Management - STANLIB 41 355 252

Africa regions1 14 8 7

Operations under ownership review (48) (166) (322)

Liberty Africa Insurance (>100) (18) 4

STANLIB Africa (92) (19) (226)

Liberty Health 44 (78) (54)

Short-term insurance 11 (51) (46)

Central costs and sundry income 5 (200) (190)

Normalised operating earnings 42 2 006 1 412

LibFin Investments - SIP (81) 250 1 307

Normalised headline earnings (17) 2 256 2 719

BEE preference shares income (20) (8) (10)

Accounting profit and loss mismatch arising on consolidation of Liberty Two Degrees (27) 397 543

IFRS headline earnings (19) 2 645 3 2521 Comprises - Liberty Africa Insurance and STANLIB Africa within Southern African region

External assets under management Change 2018 2017

% Rbn Rbn

Asset management - assets under management 15 55 48

Wealth management - funds under administration 0 337 337

Single manager unit trust (5) 122 128

Institutional marketing 14 64 56

Linked and structured life products (5) 80 84

Multi-manager 25 20 16

Africa Regions (4) 51 53

Total external assets under management and administration 2 392 385

Liberty

40


41

FINANCIAL PERFORMANCE 42 Loans and advances

43 Deposits and debt funding

44 Banking activities average balance sheet

45 Net interest income and net interest margin

46 Non-interest revenue analysis

Credit impairment analysis

48 Income statement charges

50 Balance sheet impairment roll forward


58 Operating expenses

60 Taxation

Composition of loans to customers (%)

20172018

20173635

98831

20183535

99831

Mortgage loansTerm loansVehicle and asset financeOverdraft and other demand loansOther term loansCard debtorsLoans granted under resale agreements

CLIENT TO CONFIRM LEGENDS

Loans and advances


% % Rm Rm


Mortgage loans 4 4 362 006 346 518

Vehicle and asset finance 9 10 89 410 81 640

Card debtors 3 3 33 216 32 268

Other loans and advances 11 14 165 336 144 761

Personal unsecured 12 14 59 459 52 016

Business lending and other 10 14 105 877 92 745

Corporate & Investment Banking 9 13 398 425 352 190

Global markets 20 25 26 967 21 648

Investment banking 5 8 324 611 299 522

Transactional products and services 42 52 46 843 30 859

Real estate and PIM (98) (98) 4 161

Central and other (59) (61) (1 892) (4 841)

Gross loans and advances to customers 8 10 1 046 501 952 536

Credit impairment charges on loans and advances 60 63 (36 622) (22 444)

Credit impairment charges on stage 3 (non-performing) loans 53 56 (23 801) (15 270)

Credit impairment charges on stage 1 and 2 (performing) loans 74 79 (12 821) (7 174)

Net loans and advances to customers 6 9 1 009 879 930 092

Gross loans and advances to banks (19) (6) 110 852 117 935

Credit impairment charges on loans and advances (100) (100) (63)

Net loans and advances to banks (19) (6) 110 789 117 935

Net loans and advances 3 7 1 120 668 1 048 027

Gross loans and advances 4 8 1 157 353 1 070 471


Rbn

■

Gross loans and advances to customersCAGR (2013 – 2018): 6%

2013 2014 2015 2016 2017 2018

765 832 955 944 953 1 047

0

250

500

750

1 000

1 250

42

STANDARD BANK GROUP ANALYSIS OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 FINANCIAL PERFORMANCE

Composition of deposits to customers (%)

20172018

201727211915126

201829212014106

Call depositsTerm depositsCurrent accountsCash management depositsNegotiable certificates of depositOther deposits

Deposits and debt funding


% % Rm Rm





Call deposits 1 8 132 756 123 414

Term deposits 1 4 95 702 92 428

Other deposits 29 34 45 320 33 807

Wholesale priced deposits 13 13 123 329 108 977

Corporate & Investment Banking 4 5 667 845 635 775


Call deposits 16 19 103 874 87 145

Term deposits 4 4 163 766 157 044

Negotiable certificates of deposit (10) (10) 125 184 139 834

Other funding 16 20 133 059 110 904

Central and other (21) (15) (3 971) (4 671)

Deposits from customers 6 8 1 255 192 1 166 565

Deposits from banks 4 27 116 727 91 794

Total deposits and debt funding 6 9 1 371 919 1 258 359


Wholesale priced deposits 8 9 903 930 831 875

Wholesale priced deposits - customers 9 6 787 203 740 081

Wholesale priced deposits - banks 4 27 116 727 91 794

Deposits from customersCAGR (2013 – 2018): 8%

Rbn

2013 2014 2015 2016 2017 2018

866 966 1 064 1 110 1 167 1 255

1 500

1 200

900

600

300

0

43

Banking activities average balance sheet

2018 2017

Average balance Interest

Average rate

Average balance Interest

Average rate

Rm Rm % Rm Rm %

Interest earning assetsCash and balances with central banks 23 225 23 367

Financial investments 193 104 13 462 6.97 186 037 12 554 6.75

Gross loans and advances 1 113 409 104 879 9.42 1 082 387 103 281 9.54

Gross loans and advances to banks 114 402 2 722 2.38 126 512 3 024 2.39

Gross loans and advances to customers 999 007 102 157 10.23 955 875 100 257 10.49

Personal & Business Banking 625 983 71 599 11.44 598 688 70 415 11.76

Mortgage loans 352 153 35 300 10.02 342 512 35 282 10.30

Vehicle and asset finance 84 287 9 295 11.03 80 521 9 302 11.55

Card debtors 32 787 5 300 16.16 31 886 5 362 16.82

Other loans and advances 156 756 21 704 13.85 143 769 20 469 14.24

Corporate & Investment Banking 375 000 31 816 8.48 359 913 31 232 8.68

Central and other (1 976) (1 258) (2 726) (1 390)

Credit impairment charges on loans and advances (29 296) (23 611)

Loans and advances 1 084 113 104 879 9.67 1 058 776 103 281 9.75

Interest-earning assets 1 300 442 118 341 9.10 1 268 180 115 835 9.13

Interest bearing liabilitiesDeposits and debt funding 1 314 548 56 657 4.31 1 202 868 53 417 4.44

Deposits from banks 105 148 1 141 1.09 101 073 1 273 1.26

Deposits from customers 1 209 400 55 516 4.59 1 101 795 52 144 4.73

Personal & Business Banking 560 101 19 802 3.54 512 570 18 296 3.57

Current accounts 140 959 221 0.16 130 074 211 0.16

Cash management deposits 34 527 1 876 5.43 30 430 1 684 5.53

Call deposits 249 908 9 749 3.90 227 595 9 096 4.00

Savings accounts 25 267 368 1.46 23 119 325 1.41

Term and other deposits 109 440 7 588 6.93 101 352 6 980 6.89

Corporate & Investment Banking 653 823 41 161 6.30 593 525 39 999 6.74

Cash management deposits 140 772 368 0.26 116 113 287 0.25

Call deposits 85 451 4 634 5.42 86 960 5 036 5.79

Term deposits 180 912 13 852 7.66 170 790 12 903 7.55

Negotiable certificates of deposit 137 826 11 059 8.02 141 692 11 524 8.13

Other deposits 108 862 11 248 10.33 77 970 10 249 13.14

Central and other (4 524) (5 447) (4 300) (6 151)

Subordinated bonds 18 947 2 062 10.88 20 766 2 293 11.04

Interest-bearing liabilities 1 333 495 58 719 4.40 1 223 634 55 710 4.55

Trading book assets 230 069 197 135

Non-interest earning assets 135 910 99 105

Total average assets 1 666 421 118 341 7.10 1 564 420 115 835 7.40

Average equity 137 179 134 495

Trading book liabilities 169 716 170 954

Other liabilities 26 031 35 337

Total average equity and liabilities 1 666 421 58 719 3.52 1 564 420 55 710 3.56

44


Net interest income and net interest margins

Movement in average interest earning assets, net interest income and NIMAverage interest earning

assets

Net interest income

Net interest margin

Rm Rm %

2017 1 268 180 60 125 4.74

Impact of volume changes 32 262 1 500

Lending book client yield (1 000) (0.08)

Funding book client yield 932 0.07

Funding and capital reserves endowment (905) (0.07)

Treasury activities and assets held for liquidity purposes 312 0.02

Impact of IFRS 9 (1 722) (0.13)

IFRS 9 pre-legal (553) (0.04)

IFRS 9 cured (1 169) (0.09)

Mix and other 380 0.03

2018 1 300 442 59 622 4.58

Average interest earning assets growth (%) 2.5

Net interest income growth (%) (0.8)

Favourable�� Net interest income benefited from:

– Higher mortgage lending registration and increased payouts in vehicle and asset finance portfolios in South Africa.

– Increased utilisation of overdraft and disbursements of other demand loans due to targeted sales, but offset by portfolio amortisation in South Africa.

– Good growth in deposit and loans balances in Africa Regions, following focused growth strategy.

– Increase in call and term deposits driven by fixed deposit campaigns in 2017 in South Africa.

�� Change in balance sheet mix from foreign to local loans and deposits contributed to higher margins in the corporate lending portfolio, particularly in Angola.�� Increased investment in the commercial debt securities which

qualifies as high quality liquid assets (HQLA) within investment banking, coupled with increases in the group’s HQLA due to higher liquid coverage ratio requirements.

�� Wealth International benefited from good margin growth due to a favourable change in balance sheet mix and an increase in US and UK interest rates.

Adverse�� Lower net interest income primarily due to the change in accounting

treatment of interest in suspense for pre-legal and cured loan balances under IFRS 9.�� Declining average interest rates in several countries including South

Africa, Mozambique, Kenya, Ghana and Uganda.�� Margin compression experienced in investment banking mainly due

to competitive market pressures.�� Margin squeeze in lending products, particularly mortgage lending

and vehicle and asset finance, as a result of the competitive environment in South Africa.

Net interest income and net interest margin (NIM)CAGR (2013 – 2018): 9%

Rm %

2013 2014 2015 2016 2017 2018

39 095 45 152 49 310 56 892 60 125 59 622

4.25 4.41 4.11 4.48 4.74 4.58

70 000

56 000

42 000

28 000

14 000

0 0

1.6

3.2

4.8

6.4

8.0

Net interest incomeNIM before impairment charges

45

Analysis of non-interest revenueCAGR (2013 – 2018): Net fee and commission 6% Trading revenue 7% Other revenue 1%

Rm

■

■

■

2013 2014 2015 2016 2017 2018

23 042 26 079 26 920 29 012 28 670 30 375

7 811 9 294 11 016 10 988 10 731 11 129

3 316 3 518 3 867 2 965 3 173 3 533

672

50 000

40 000

30 000

20 000

10 000

0

Net fee and commission Trading revenueOther revenueOther gains and losses on financial instruments


% % Rm Rm

Net fee and commission revenue 7 6 30 375 28 670

Fee and commission revenue 8 7 36 592 34 290

Account transaction fees 3 2 11 669 11 488

Electronic banking 11 11 3 829 3 446

Knowledge-based fees and commission 4 3 2 350 2 278

Card-based commission 4 3 6 760 6 535

Insurance - fees and commission (2) (2) 1 904 1 945

Documentation and administration fees 6 3 2 273 2 197

Foreign currency service fees 22 19 2 244 1 879

Other 25 23 5 563 4 522

Fee and commission expense 11 11 (6 217) (5 620)

Trading revenue 5 4 11 129 10 731

Fixed income and currencies 0 (1) 8 911 9 043

Commodities (24) (24) 47 62

Equities 34 34 2 171 1 626

Other revenue 12 11 3 533 3 173

Banking and other 2 3 1 030 1 001

Property-related revenue 12 11 407 367

Insurance-related revenue 17 16 2 096 1 805

Other gains and losses on financial instruments 100 100 672

Non-interest revenue 9 7 45 709 42 5741 Restated. Refer to page 99.

Non-interest revenue analysis

Non-interest revenueCAGR (2013 – 2018): 6%

Rm %

2013 2014 2015 2016 2017 2018

34 108 38 609 41 439 42 601 42 574 45 709

46.6 46.1 45.7 42.8 41.5 43.4

50 000

40 000

30 000

20 000

10 000

0 0

16

32

48

64

80

Non-interest revenueNon-interest revenue to total revenue

46


Distribution of daily trading profit or loss

Days

<(30) 0 to 30 30 to 60 60 to 90 >90(30) to 0

2017 – number of days2018 – number of days

1 5 108 109 25 12

0 9 101 113 23 13

0

24

48

72

96

120

FavourableNet fee and commission revenue�� Lower transactional volumes in branches due to the migration of

clients from traditional to digital platforms.�� Expansion in electronic banking fees supported by:

– Marked growth in digital transactional volumes in Namibia, Nigeria, South Africa and Zimbabwe as customers shift towards the use of digital banking platforms.

– Higher transactional volumes on ATMs by non-Standard Bank customers.

– Growth in Instant Money and Business Online transactional volumes in South Africa.

�� Higher card based commission assisted by: – A rise in issuing and acquiring turnover in South Africa, albeit

impacted by contraction in gross merchant discount and reduction in credit card account base.

– Increased point of sales devices turnover related to higher transactional volumes on debit card in South Africa and Zimbabwe.

�� Strong growth in foreign currency service fees due to increased client activities and transactional volumes in Angola, Nigeria, South Africa, Tanzania, and Zambia.�� Other fee and commission revenue benefited from:

– Continued strong growth in the pension fund business driven by higher assets under management in Nigeria.

– Growth in upfront, guarantees and custody fees linked to increased client activity in South Africa and Africa Regions.

– Increased commissions earned from prepaid transactional volumes and trust income from higher estate completion rate.

Trading revenue�� Increased dividends received from equity trading positions in South

Africa.�� Improved equity trading revenue on SBG shares held by the group to

facilitate client trading activities. �� Gains made as a result of market dislocation.�� Gains from forex trading following heightened volatility in key

markets.

Partly offset by:�� Lower client flows due to negative emerging market sentiments,

particularly in South Africa.

Other revenue increased average insurance premiums as the portfolio tilted towards higher cover and premium products.

Gains and losses on financial instruments Interest income on certain debt instruments, together with the derecognition gains and losses on instruments not recognised at fair value through profit and loss are now recorded in other gains and losses on financial instruments, in accordance with IFRS 9.

47

Credit impairment analysisIncome statement charges

Income statement credit impairment charges on loans and advances

2018 2017

Change Stage 1 Stage 2

Total stage 1

and 2 Stage 31

Total credit impairment

charges

Total credit

loss ratio

Performing loans credit impairment

Non-performing

loans credit impairment


chargeTotal credit

loss ratio

% Rm Rm Rm Rm Rm % Rm Rm Rm %

Personal & Business Banking (30) (283) (159) (442) 5 906 5 464 0.81 (294) 8 079 7 785 1.20

Mortgage lending (40) (88) 47 (41) 981 940 0.27 (55) 1 626 1 571 0.46

Vehicle and asset finance (10) (1) (84) (85) 874 789 0.94 (141) 1 013 872 1.09

Card debtors (30) (55) 197 142 818 960 2.93 61 1 318 1 379 4.33

Other loans and advances (30) (139) (319) (458) 3 233 2 775 1.34 (159) 4 122 3 963 2.01

Personal unsecured lending (20) 103 (70) 33 1 814 1 847 3.34 (70) 2 377 2 307 4.29

Business lending and other (44) (242) (249) (491) 1 419 928 0.61 (89) 1 745 1 656 1.15

Corporate & Investment Banking (54) 35 (1 402) (1 367) 2 114 747 0.16 649 976 1 625 0.34

Corporate and sovereign lending (53) 49 (1 398) (1 349) 2 114 765 0.20 649 976 1 625 0.34

Bank lending (100) (14) (4) (18) (18) (0.02)

Total loans and advances credit impairment charges (34) (248) (1 561) (1 809) 8 020 6 211 0.56 355 9 055 9 410 0.87

Credit impairment charge - financial investments 101

Credit impairment charge - letters of credit, guarantees and other 177

Total credit impairment charges 6 4891 Includes post write-off recoveries and modification gains and losses.

0

0.4

0.8

1.2

2.0

1.6

Credit impairment charges on loans and advancesCAGR (2013 – 2018): (7)%

Rm %

2013 2014 2015 2016 2017 2018

9 158 9 009 9 371 9 533 9 410 6 211

1.12 1.00 0.87 0.86 0.87 0.56

12 000

9 600

7 200

4 800

2 400

0

Credit impairment chargesCredit loss ratio

48


Income statement credit impairment charges on loans and advances

2018 2017


Total stage 1

and 2 Stage 31


charges

Total credit

loss ratio

Performing loans credit impairment

Non-performing

loans credit impairment


chargeTotal credit

loss ratio


Personal & Business Banking (30) (283) (159) (442) 5 906 5 464 0.81 (294) 8 079 7 785 1.20

Mortgage lending (40) (88) 47 (41) 981 940 0.27 (55) 1 626 1 571 0.46

Vehicle and asset finance (10) (1) (84) (85) 874 789 0.94 (141) 1 013 872 1.09

Card debtors (30) (55) 197 142 818 960 2.93 61 1 318 1 379 4.33



Business lending and other (44) (242) (249) (491) 1 419 928 0.61 (89) 1 745 1 656 1.15

Corporate & Investment Banking (54) 35 (1 402) (1 367) 2 114 747 0.16 649 976 1 625 0.34

Corporate and sovereign lending (53) 49 (1 398) (1 349) 2 114 765 0.20 649 976 1 625 0.34

Bank lending (100) (14) (4) (18) (18) (0.02)

Total loans and advances credit impairment charges (34) (248) (1 561) (1 809) 8 020 6 211 0.56 355 9 055 9 410 0.87

Credit impairment charge - financial investments 101

Credit impairment charge - letters of credit, guarantees and other 177

Total credit impairment charges 6 4891 Includes post write-off recoveries and modification gains and losses.

Favourable�� Lower credit impairments within stage 3, primarily due to the

change in accounting treatment of interest in suspense for pre-legal and cured loan balances in IFRS 9.�� Higher post write-off recoveries realised in South Africa during

the year.�� Lower stage 3 impairment charges incurred in Nigeria attributed to

the non-repeat of accelerated write offs in the prior period.�� Collection strategy enhancements resulted in lower credit

impairment charges in stage 1 and 2 portfolios.�� Improved book quality across products within Africa regions.�� Enhanced approach to customer specific provisioning applied to

large as well as collateralised exposures.

Adverse�� Increased impairment provisioning in stage 3 raised against clients

in the consumer and construction sector following contracting economic environment in South Africa.�� Higher credit provisioning required in mortgage lending portfolio as

a result of the prolonged legal environment in South Africa.�� Increased defaults within the business lending portfolio as

customers face challenging economic environment.

49

1 January 2018

IFRS 9 opening balance

Transfer between

stages

Netprovisions raised and

released

Impaired accounts

written off

Currency translation

and other movements1

2018 closing

balance

2018 recoveries of

amounts written off

net of modification

losses

Rm Rm Rm Rm Rm Rm Rm

Total expected credit lossPersonal & Business Banking 27 202 6 413 (6 904) 1 336 28 047 949

Mortgage lending 9 396 1 067 (995) 662 10 130 127

Vehicle and asset finance 3 236 1 074 (1 027) 119 3 402 285

Card debtors 3 179 1 187 (1 341) 42 3 067 227

Other loans and advances 11 391 3 085 (3 541) 513 11 448 310

Personal unsecured lending 6 783 2 026 (2 342) 220 6 687 179

Business lending and other 4 608 1 059 (1 199) 293 4 761 131

Corporate & Investment Banking 7 837 824 (1 275) 1 252 8 638 77

Corporate and sovereign lending 7 792 842 (1 275) 1 216 8 575 77

Bank lending 45 (18) 36 63

Total 35 039 7 237 (8 179) 2 588 36 685 1 0261 Currency translation and other movements includes interest in suspense movement.

Net provisions raised less recoveries on the amounts written off net of modification losses is equal to the income statement credit impairment charge (2018: R7 237 million - R1 026 million = R6 211 million).

1 January 2018


Transfer between

stages


released

Impaired accounts

written off



2018 closing

balance

2018 recoveries of

amounts written off

net ofmodification

losses


Stage 3 and purchased and originated credit impairedPersonal & Business Banking 16 040 14 6 978 (6 904) 1 164 17 292 1 086

Mortgage lending 6 256 (238) 1 406 (995) 646 7 075 187

Vehicle and asset finance 1 476 98 1 061 (1 027) 76 1 684 285

Card debtors 1 660 (67) 1 152 (1 341) 40 1 444 267

Other loans and advances 6 648 221 3 359 (3 541) 402 7 089 347

Personal unsecured lending 4 079 93 1 931 (2 342) 191 3 952 210

Business lending and other 2 569 128 1 428 (1 199) 211 3 137 137

Corporate & Investment Banking 4 935 1 090 1 101 (1 275) 658 6 509 77

Corporate and sovereign lending 4 935 1 090 1 101 (1 275) 658 6 509 77

Total 20 975 1 104 8 079 (8 179) 1 822 23 801 1 163

1 Currency translation and other movements includes interest in suspense movement Net provisions raised and transfers less recoveries on the amounts written off net of modification losses is equal to the income statement credit impairment charge (2018: R8 079 million + R1 104 million - R1 163 = R8 020 million).

Credit impairment analysisBalance sheet impairment roll forward for loans and advances

50


1 January 2018


Transfer between

stages


released

Impaired accounts

written off



2018 closing

balance

2018 recoveries of

amounts written off

net of modification

losses


Total expected credit lossPersonal & Business Banking 27 202 6 413 (6 904) 1 336 28 047 949

Mortgage lending 9 396 1 067 (995) 662 10 130 127

Vehicle and asset finance 3 236 1 074 (1 027) 119 3 402 285

Card debtors 3 179 1 187 (1 341) 42 3 067 227



Business lending and other 4 608 1 059 (1 199) 293 4 761 131

Corporate & Investment Banking 7 837 824 (1 275) 1 252 8 638 77

Corporate and sovereign lending 7 792 842 (1 275) 1 216 8 575 77


Total 35 039 7 237 (8 179) 2 588 36 685 1 0261 Currency translation and other movements includes interest in suspense movement.

Net provisions raised less recoveries on the amounts written off net of modification losses is equal to the income statement credit impairment charge (2018: R7 237 million - R1 026 million = R6 211 million).

1 January 2018


Transfer between

stages


released

Impaired accounts

written off



2018 closing

balance

2018 recoveries of

amounts written off

net ofmodification

losses


Stage 3 and purchased and originated credit impairedPersonal & Business Banking 16 040 14 6 978 (6 904) 1 164 17 292 1 086


Vehicle and asset finance 1 476 98 1 061 (1 027) 76 1 684 285

Card debtors 1 660 (67) 1 152 (1 341) 40 1 444 267

Other loans and advances 6 648 221 3 359 (3 541) 402 7 089 347

Personal unsecured lending 4 079 93 1 931 (2 342) 191 3 952 210

Business lending and other 2 569 128 1 428 (1 199) 211 3 137 137

Corporate & Investment Banking 4 935 1 090 1 101 (1 275) 658 6 509 77

Corporate and sovereign lending 4 935 1 090 1 101 (1 275) 658 6 509 77

Total 20 975 1 104 8 079 (8 179) 1 822 23 801 1 163

1 Currency translation and other movements includes interest in suspense movement Net provisions raised and transfers less recoveries on the amounts written off net of modification losses is equal to the income statement credit impairment charge (2018: R8 079 million + R1 104 million - R1 163 = R8 020 million).

51


1 January 2018


Transfer between

stages

Net provisions raised and

released

Impaired accounts

written off


and other movements

2018 closing

balance

2018 recoveries of

amounts written off

net ofmodification

losses


Stage 2Personal & Business Banking 6 283 (848) 552 111 6 098 (137)

Mortgage lending 2 014 (144) 131 17 2 018 (60)

Vehicle and asset finance 994 (324) 240 38 948

Card debtors 821 (109) 266 2 980 (40)

Other loans and advances 2 454 (271) (85) 54 2 152 (37)

Personal unsecured lending 1 406 (17) (84) (5) 1 300 (31)

Business lending and other 1 048 (254) (1) 59 852 (6)

Corporate & Investment Banking 1 992 (1 240) (162) 456 1 046

Corporate and sovereign lending 1 992 (1 240) (158) 449 1 043

Bank lending (4) 7 3

Total 8 275 (2 088) 390 567 7 144 (137)Net provisions raised and transfers less recoveries on the amounts written off net of modification losses is equal to the income statement credit impairment charge (2018: R390 million + (R2 088 million) - (R137 million) = (R1 561 million)).

1 January 2018


Transfer between

stages


released

Impaired accounts

written off


and other movements

2018 closing

balance

2018 recoveries of

amounts written off

net ofmodification

losses


Stage 1Personal & Business Banking 4 879 834 (1 117) 61 4 657

Mortgage lending 1 126 382 (470) (1) 1 037

Vehicle and asset finance 766 226 (227) 5 770

Card debtors 698 176 (231) 643

Other loans and advances 2 289 50 (189) 57 2 207

Personal unsecured lending 1 298 (76) 179 34 1 435

Business lending and other 991 126 (368) 23 772

Corporate & Investment Banking 910 150 (115) 138 1 083

Corporate and sovereign lending 865 150 (101) 109 1 023


Total 5 789 984 (1 232) 199 5 740Net provisions raised and transfers is equal to the income statement credit impairment charge (2018: (R1 232 million) + R984 million = (R248million)).

52


1 January 2018


Transfer between

stages


released

Impaired accounts

written off


and other movements

2018 closing

balance

2018 recoveries of

amounts written off

net ofmodification

losses



Mortgage lending 2 014 (144) 131 17 2 018 (60)

Vehicle and asset finance 994 (324) 240 38 948

Card debtors 821 (109) 266 2 980 (40)

Other loans and advances 2 454 (271) (85) 54 2 152 (37)

Personal unsecured lending 1 406 (17) (84) (5) 1 300 (31)

Business lending and other 1 048 (254) (1) 59 852 (6)

Corporate & Investment Banking 1 992 (1 240) (162) 456 1 046

Corporate and sovereign lending 1 992 (1 240) (158) 449 1 043

Bank lending (4) 7 3

Total 8 275 (2 088) 390 567 7 144 (137)Net provisions raised and transfers less recoveries on the amounts written off net of modification losses is equal to the income statement credit impairment charge (2018: R390 million + (R2 088 million) - (R137 million) = (R1 561 million)).

1 January 2018


Transfer between

stages


released

Impaired accounts

written off


and other movements

2018 closing

balance

2018 recoveries of

amounts written off

net ofmodification

losses


Stage 1Personal & Business Banking 4 879 834 (1 117) 61 4 657

Mortgage lending 1 126 382 (470) (1) 1 037

Vehicle and asset finance 766 226 (227) 5 770

Card debtors 698 176 (231) 643

Other loans and advances 2 289 50 (189) 57 2 207

Personal unsecured lending 1 298 (76) 179 34 1 435

Business lending and other 991 126 (368) 23 772

Corporate & Investment Banking 910 150 (115) 138 1 083

Corporate and sovereign lending 865 150 (101) 109 1 023


Total 5 789 984 (1 232) 199 5 740Net provisions raised and transfers is equal to the income statement credit impairment charge (2018: (R1 232 million) + R984 million = (R248million)).

53

Balance sheet reconciliation

2017 Opening Balance

IAS 39 discount in

opening balance


released

IAS 39 discount

in new impairments

raised

Impaired accounts

written off

IAS 39 discount

recycled to net interest

income

Currency translation and other

movements

2017 Closing balance

IAS 39 discount in

closing balance

2017 Recoveries

of amounts written off

in previous years

Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm

Specific credit impairmentsPersonal & Business Banking 11 767 890 8 873 777 (7 549) (808) (340) 11 943 859 794

Mortgage lending 3 640 419 1 826 315 (1 159) (317) (11) 3 979 417 200

Vehicle and asset finance 1 410 105 1 261 120 (1 146) (120) (38) 1 367 105 248

Card debtors 1 598 19 1 415 24 (1 383) (26) (8) 1 596 17 97

Other loans and advances 5 119 347 4 371 318 (3 861) (345) (283) 5 001 320 249

Personal unsecured lending 3 593 252 2 512 187 (2 533) (274) (111) 3 187 165 135

Business lending and other 1 526 95 1 859 131 (1 328) (71) (172) 1 814 155 114

Corporate & Investment Banking 2 890 78 1 024 95 (245) (102) (242) 3 325 71 48

Corporate loans 2 727 72 1 055 95 (221) (97) (263) 3 201 70 48

Commercial property finance 163 6 (31) (24) (5) 21 124 1

Central and other 2 2

Total 14 659 968 9 897 872 (7 794) (910) (582) 15 270 930 842

Portfolio credit impairmentsPersonal & Business Banking 4 938 (294) (99) 4 545

Mortgage lending 1 137 (55) (5) 1 077

Vehicle and asset finance 801 (141) (7) 653

Card debtors 651 61 (47) 665

Other loans and advances 2 349 (159) (40) 2 150

Personal unsecured lending 1 317 (70) (6) 1 241

Business lending and other 1 032 (89) (34) 909

Corporate & Investment Banking 1 796 649 (216) 2 229

Corporate loans 1 699 649 (177) 2 171

Commercial property finance 97 (39) 58


Total 7 134 355 (315) 7 174

Total impairmentsPersonal & Business Banking 16 705 890 8 579 777 (7 549) (808) (439) 16 488 859 794



Card debtors 2 249 19 1 476 24 (1 383) (26) (55) 2 261 17 97





Corporate loans 4 426 72 1 704 95 (221) (97) (440) 5 372 70 48

Commercial property finance 260 6 (31) (24) (5) (18) 182 1


Total 21 793 968 10 252 872 (7 794) (910) (897) 22 444 930 842

Balance sheet impairments as a % of gross loans and advances 2.0 2.1Net provisions raised less recoveries on the amounts written off in previous periods equal to the income statement credit impairment charge (2017: R10 252million - R842 million = R9 410 million).


54


Balance sheet reconciliation

2017 Opening Balance

IAS 39 discount in

opening balance


released

IAS 39 discount

in new impairments

raised

Impaired accounts

written off

IAS 39 discount

recycled to net interest

income

Currency translation and other

movements


IAS 39 discount in

closing balance

2017 Recoveries

of amounts written off

in previous years





Card debtors 1 598 19 1 415 24 (1 383) (26) (8) 1 596 17 97





Corporate loans 2 727 72 1 055 95 (221) (97) (263) 3 201 70 48

Commercial property finance 163 6 (31) (24) (5) 21 124 1


Total 14 659 968 9 897 872 (7 794) (910) (582) 15 270 930 842


Mortgage lending 1 137 (55) (5) 1 077

Vehicle and asset finance 801 (141) (7) 653

Card debtors 651 61 (47) 665

Other loans and advances 2 349 (159) (40) 2 150

Personal unsecured lending 1 317 (70) (6) 1 241

Business lending and other 1 032 (89) (34) 909

Corporate & Investment Banking 1 796 649 (216) 2 229

Corporate loans 1 699 649 (177) 2 171

Commercial property finance 97 (39) 58


Total 7 134 355 (315) 7 174

Total impairmentsPersonal & Business Banking 16 705 890 8 579 777 (7 549) (808) (439) 16 488 859 794



Card debtors 2 249 19 1 476 24 (1 383) (26) (55) 2 261 17 97





Corporate loans 4 426 72 1 704 95 (221) (97) (440) 5 372 70 48

Commercial property finance 260 6 (31) (24) (5) (18) 182 1


Total 21 793 968 10 252 872 (7 794) (910) (897) 22 444 930 842

Balance sheet impairments as a % of gross loans and advances 2.0 2.1Net provisions raised less recoveries on the amounts written off in previous periods equal to the income statement credit impairment charge (2017: R10 252million - R842 million = R9 410 million).

55

Credit impairment analysisLoans and advances performance

Gross carrying

loans and advances

SB 1 - 12 SB 13 - 20 SB 21 – 25

Total stage 1

and 2loans

Total stage 3

Securitiesand

expectedrecoveries

onstage 3

exposureloans

Balance sheet

expected credit loss

and interest in suspense

on stage 3

Gross stage 3

coverageStage 3

exposuresStage 1 Stage 2 Stage 1 Stage 2 Stage 1 Stage 2

Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm % %

2018Personal & Business Banking 701 723 191 602 1 815 407 955 7 083 8 220 50 589 667 264 34 459 17 167 17 292 50 4.9

Mortgage loans 362 006 108 575 1 786 196 795 4 332 4 261 27 840 343 589 18 417 11 342 7 075 38 5.1

Instalment sale and finance leases 89 410 1 250 11 75 939 1 214 347 7 138 85 899 3 511 1 827 1 684 48 3.9

Card debtors 33 216 1 604 8 25 382 174 317 3 882 31 367 1 849 405 1 444 78 5.6

Other loans and advances 217 091 80 173 10 109 839 1 363 3 295 11 729 206 409 10 682 3 593 7 089 66 4.9

Personal unsecured lending 59 459 961 46 457 8 1 556 5 625 54 607 4 852 900 3 952 81 8.2

Business lending and other 157 632 79 212 10 63 382 1 355 1 739 6 104 151 802 5 830 2 693 3 137 54 3.7

Corporate & Investment Banking 510 113 291 386 4 912 179 889 17 965 3 833 2 394 500 379 9 734 3 225 6 509 67 1.9

Corporate and sovereign lending 397 261 187 111 4 910 174 045 17 727 1 340 2 394 387 527 9 734 3 225 6 509 67 2.5

Bank lending 112 852 104 275 2 5 844 238 2 493 112 852

Central and Other (55 687) (55 687) (55 687)

Gross loans and advances 1 156 149 427 301 6 727 587 844 25 048 12 053 52 983 1 111 956 44 193 20 392 23 801 54 3.8

Percentage of total book (%) 100 37.0 0.6 50.8 2.2 1.0 4.6 96.2 3.8 1.8 2.1

Gross loans and advances at amortised cost 1 156 149

Gross loans and advances at fair value 1 204

Total gross loans and advances 1 157 353

The group uses a 25-point master rating scale to quantify the credit risk for each borrower (corporate asset classes) or facility (specialised lending and retail asset classes). Ratings are mapped to PDs by means of calibration formulae that uses historical default rates and other data from the applicable portfolio.

Gross loans and advances

Totalperforming

loans

Total non-

performingloans

Securities and expected recoveries on

specifically impaired

loans

Net after securities

and expected recoveries on


loans

Balance sheet

impairments for non-

performing specifically

impaired loans

Specific gross impairment

coverage

Non-performing

loans

Rm Rm Rm Rm Rm Rm % %

2017Personal & Business Banking 645 868 616 949 28 919 16 976 11 943 11 943 41 4.5

Mortgage loans 346 518 331 014 15 504 11 525 3 979 3 979 26 4.5

Vehicle and asset finance 81 640 78 514 3 126 1 759 1 367 1 367 44 3.8

Card debtors 32 268 30 148 2 120 524 1 596 1 596 75 6.6

Other loans and advances 185 442 177 273 8 169 3 168 5 001 5 001 61 4.4

Personal unsecured lending 52 016 47 827 4 189 1 002 3 187 3 187 76 8.1

Business lending and other 133 426 129 446 3 980 2 166 1 814 1 814 46 3.0

Corporate & Investment Banking 472 437 466 862 5 575 2 250 3 325 3 325 60 1.2

Corporate loans 408 624 403 243 5 381 2 180 3 201 3 201 59 1.3

Commercial property finance 63 813 63 619 194 70 124 124 64 0.3

Central and other (47 834) (47 836) 2 2 2

Gross loans and advances 1 070 471 1 035 975 34 496 19 226 15 270 15 270 44 3.2

Percentage of total book (%) 100.0 96.8 3.2 1.8 1.4 1.4

56


Gross carrying

loans and advances

SB 1 - 12 SB 13 - 20 SB 21 – 25

Total stage 1

and 2loans

Total stage 3

Securitiesand

expectedrecoveries

onstage 3

exposureloans

Balance sheet



on stage 3

Gross stage 3

coverageStage 3




Mortgage loans 362 006 108 575 1 786 196 795 4 332 4 261 27 840 343 589 18 417 11 342 7 075 38 5.1


Card debtors 33 216 1 604 8 25 382 174 317 3 882 31 367 1 849 405 1 444 78 5.6


Personal unsecured lending 59 459 961 46 457 8 1 556 5 625 54 607 4 852 900 3 952 81 8.2


Corporate & Investment Banking 510 113 291 386 4 912 179 889 17 965 3 833 2 394 500 379 9 734 3 225 6 509 67 1.9

Corporate and sovereign lending 397 261 187 111 4 910 174 045 17 727 1 340 2 394 387 527 9 734 3 225 6 509 67 2.5

Bank lending 112 852 104 275 2 5 844 238 2 493 112 852

Central and Other (55 687) (55 687) (55 687)

Gross loans and advances 1 156 149 427 301 6 727 587 844 25 048 12 053 52 983 1 111 956 44 193 20 392 23 801 54 3.8


Gross loans and advances at amortised cost 1 156 149

Gross loans and advances at fair value 1 204

Total gross loans and advances 1 157 353

The group uses a 25-point master rating scale to quantify the credit risk for each borrower (corporate asset classes) or facility (specialised lending and retail asset classes). Ratings are mapped to PDs by means of calibration formulae that uses historical default rates and other data from the applicable portfolio.

Gross loans and advances

Totalperforming

loans

Total non-

performingloans



loans

Net after securities

and expected recoveries on


loans

Balance sheet



impaired loans

Specific gross impairment

coverage

Non-performing

loans



Mortgage loans 346 518 331 014 15 504 11 525 3 979 3 979 26 4.5


Card debtors 32 268 30 148 2 120 524 1 596 1 596 75 6.6


Personal unsecured lending 52 016 47 827 4 189 1 002 3 187 3 187 76 8.1



Corporate loans 408 624 403 243 5 381 2 180 3 201 3 201 59 1.3


Central and other (47 834) (47 836) 2 2 2

Gross loans and advances 1 070 471 1 035 975 34 496 19 226 15 270 15 270 44 3.2


57

Operating expenses


% % Rm Rm

Staff costsFixed remuneration 10 8 23 496 21 732

Variable remuneration 2 1 7 703 7 602

Charge for incentive payments (3) (3) 5 592 5 762

IFRS 2 charge: cash-settled share schemes 4 4 549 528

IFRS 2 charge: equity-settled share schemes 24 19 1 562 1 312

Other staff costs 12 10 2 574 2 338

Total staff costs 8 7 33 773 31 672

Variable remuneration as a % of total staff costs 22.8 24.0

Other operating expensesInformation technology 5 5 6 379 6 073

Amortisation of intangible assets 3 3 2 437 2 371

Depreciation 4 3 2 542 2 471

Premises 3 1 4 052 3 994

Professional fees 22 23 2 013 1 636

Communication 2 1 1 117 1 105

Marketing and advertising (0) (1) 1 954 1 967

Other 3 1 5 817 5 760

Total other operating expenses 5 4 26 311 25 377

Total operating expenses 6 5 60 084 57 049

Total income 4 3 105 331 102 699

Cost-to-income ratio (%) 57.0 55.5

Jaws (%) (2.8) 1.11 Restated. Refer to page 99.

Analysis of total information technology function spendCCY Change 2018 2017

% % Rm Rm

IT staff costs 12 13 4 065 3 605

Information technology licences, maintenance and related costs 5 5 6 379 6 073

Amortisation of intangible assets 3 3 2 437 2 371

Depreciation and other expenses 8 9 2 570 2 355

Total information technology function spend 7 7 15 451 14 404

Rm

Operating expensesCAGR (2013 – 2018): 8%

2013 2014 2015 2016 2017 2018

41 689 46 314 51 070 55 871 57 049 60 084

0

14 000

28 000

42 000

58 000

70 000

Cost and income growth

% %

2013 2014 2015 2016 2017 2018

10.45 14.42 8.34 9.64 3.22 2.56

12.58 11.09 10.27 9.40 2.11 5.32

56.9 55.3 56.3 56.2 55.5 57.0

0.0

3.5

7.0

10.5

14.0

17.5

0

12

24

36

48

60

Total income growth Total cost growthCost-to-income ratio

58


Change

% 2018 2017

Headcount by business unitPersonal & Business Banking (2) 27 470 28 074

Corporate & Investment Banking (1) 3 755 3 811

Central and other (including corporate functions) (1) 16 194 16 437

Banking activities (2) 47 419 48 322

Headcount by geographySouth Africa (3) 31 829 32 876

Africa Regions 1 14 951 14 831

International 4 639 615

Banking activities (2) 47 419 48 322

Staff costs and headcount�� Lower headcount mainly driven by natural attrition digital efficiencies

and management action.�� Fixed remuneration linked to annual salary increases, annualisation

of new hires, separation costs relating to IT restructure and deployment of higher skilled staff to customer facing positions. �� Salary adjustments in Ghana and Angola to market related rates.�� Variable remuneration aligned to performance.

Other operating expenses�� Increased information technology spend due to a stronger USD,

renegotiated software and licence contracts and upgrades of internet lines across the branch network to improve customer connectivity.�� Additional professional fees incurred linked to projects to improve

customer experience, regulatory changes, risk and compliance improvements.

Banking activities headline earnings per employee

R’000sNumber of employees

2013 2014 2015 2016 2017 2018

343 346 424 454 502 545

42 221 42 642 47 958 48 622 48 322 47 419

Headline earnings per employeeNumber of employees

0

120

240

360

480

600

0

10 000

20 000

30 000

40 000

50 000

59

Taxation

Direct taxation rate reconciliation2018 2017

% %

Direct taxation - statutory rate 28.0 28.0

Prior period tax (0.1) (0.8)

Total direct taxation - current period 27.9 27.2

Adjustments: Foreign tax and withholdings tax 2.5 2.8

Normal direct taxation - current period 30.4 30.0

Permanent differences: (9.1) (8.0)

Non-taxable income - dividends (4.1) (3.8)

Non-taxable income - other (6.3) (7.0)

Effects of profits taxed in different jurisdictions (0.7) (0.4)

Other 2.0 3.2

Effective direct taxation rate 21.3 22.0

Direct taxation charge and effective direct taxation rate

Rm %

Direct taxation charge E�ective direct taxation rate

2013 2014 2015 2016 2017 2018

4 626 6 120 5 873 7 631 7 644 7 823

19.4 21.6 21.6 24.4 22.0 21.3

9 000

7 200

5 400

3 600

1 800

0

26.0

20.8

15.6

10.4

5.2

0

60


61

LIQUIDITY AND CAPITAL MANAGEMENT 62 Liquidity management

64 Return on equity, cost of equity and economic returns

65 Currency translation effects and economic capital

66 Risk-weighted assets

67 Return on risk-weighted assets

68 Capital adequacy

70 Other capital instruments

Liquidity management

Liquidity management overview�� Appropriate liquidity buffers were held in line with regulatory and

internal stress testing requirements, taking into account the global risk profile and market conditions.

�� Proactive liquidity management, in line with group liquidity standards, ensured that despite volatile and constrained liquidity environments in certain jurisdictions, adequate liquidity was maintained to fully support balance sheet strategies.

�� The group maintained both the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR) in excess of the minimum regulatory requirements throughout 2018.

�� The group successfully increased longer term funding, in excess of 12 months, raising R28.3 billion through a combination of negotiable certificate of deposits, senior debt and syndicated loans. SBG issued R5.0 billion of Basel III compliant Tier II capital in 2018, the proceeds of which have been invested in SBSA on the same terms and conditions as those applicable to the Tier II capital in SBG.

Total contingent liquidity�� Portfolios of marketable and liquid instruments to meet regulatory

and internal stress testing requirements are maintained as protection against unforeseen disruptions in cash flows. These portfolios are managed within ALCO-defined limits on the basis of diversification and liquidity.

�� Managed liquidity represents unencumbered marketable instruments other than eligible Basel III LCR high quality liquid assets (HQLA) (excluding trading assets), which would be able to provide sources of liquidity in a stress scenario.

�� The table below provides a breakdown of the group’s liquid and marketable instruments as at 31 December 2018.

Total contingent liquidity2018 2017

Rbn Rbn

Eligible LCR HQLA¹ comprising: 301.3 251.3

Notes and coins 20.3 18.3

Balances with central banks 42.6 38.8

Government bonds and bills 194.4 149.1

Other eligible liquid assets 44.0 45.1

Managed liquidity 83.8 71.0

Total contingent liquidity 385.1 322.3

Total contingent liquidity as a % of funding-related liabilities 27.6 25.2

1 Eligible LCR HQLA are defined according to the Basel Committee on Banking Supervision LCR and liquidity risk monitoring framework and consider any liquidity transfer restrictions that will inhibit the transfer of HQLA across jurisdictions.

Liquidity coverage ratio (average)�� The Basel III LCR promotes short-term resilience of the group’s 30

calendar day liquidity risk profile by ensuring it has sufficient HQLA to meet potential outflows in a stressed environment.

�� The SBG and SBSA LCR figures reflect the simple average of 92 days of daily observations over the quarter ended 31 December 2018.

20181 2017

Rbn Rbn

SBGTotal HQLA 275.3 240.9

Net cash outflows 235.8 178.3

LCR (%) 116.8 135.1

SBSA2

Total HQLA 179.1 157.7

Net cash outflows 162.6 158.0

LCR (%) 110.1 99.8

Minimum requirement (%) 90.0 80.01 Includes daily results for SBSA, SBSA Isle of Man branch, Stanbic Bank Ghana,

Stanbic Bank Uganda, Standard Bank Namibia, Stanbic IBTC Bank Nigeria, Standard Bank Isle of Man Limited and Standard Bank Jersey Limited and the simple average of three month-end data points ended 31 December 2018 for the other Africa Regions' banking entities.

2 Excludes foreign branches.

Structural liquidity requirementsNet stable funding ratio�� The objective of the Basel III NSFR is to promote funding stability

and resilience in the banking sector by requiring banks to maintain a stable funding profile in relation to the composition of assets and off-balance sheet activities.

�� The available stable funding is defined as the portion of capital and liabilities expected to be available over the one year time horizon considered by the NSFR.

�� The amount of required stable funding is a function of the liquidity characteristics and residual maturities of the various assets (including off-balance sheet exposures) held by the bank.

2018

Rbn

SBGAvailable stable funding 1 070.3

Required stable funding 902.2

NSFR (%) 118.6

SBSA1

Available stable funding 761.1

Required stable funding 718.4

NSFR (%) 105.9

Minimum requirement (%) 100.01 Excludes foreign branches.

62

STANDARD BANK GROUP ANALYSIS OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 LIQUIDITY AND CAPITAL MANAGEMENT

Diversified funding base�� Funding markets are evaluated on an ongoing basis to ensure

appropriate group funding strategies are executed depending on the competitive and regulatory environment. The group continued to focus on building its deposit base as a key component of the funding mix. Deposits sourced from South Africa and other major jurisdictions in the Africa Regions, Isle of Man and Jersey provide diversity of stable sources of funding for the group.

Funding-related liabilities composition1

2018 2017

Rbn Rbn

Corporate funding 418 391

Retail deposits² 378 343

Institutional funding 305 296

Government and parastatals 86 72

Interbank funding 88 60

Senior debt 59 58

Term loan funding 29 32

Subordinated debt issued 21 19

Other liabilities to the public 9 6

Total banking activities Funding-related liabilities 1 393 1 277

1 Composition aligned to Basel III liquidity classification.2 Comprises individual and small business customers.

Funding costs�� The market cost of liquidity is measured as the spread paid on NCDs

relative to the prevailing reference rate.

�� Over the course of 2018, market costs of liquidity reduced by 22.5bps in the 60-month tenor, driven by tighter clearing spreads recorded in the NCD and senior debt market. This was driven by continued limited supply of high quality corporate credit issuance into capital markets. The cost of liquidity in money markets, measured by the 12 month NCD, recorded an increase of 7.5 bps over the 12-month period.

SBSA 12 and 60-month liquidity spread

bps

12-month NCD60-month NCD

0

20

40

60

80

100

120

140

160

180

2013 2014 2015 2016 2017 2018

Standard Bank Group Analysis of financial results for the six months ended 30 June 2018 63

Return on equity, cost of equity and economic returns

ROE and average equity2018 2017

Average equity ROE

Average equity ROE

Rm % Rm %

Personal & Business Banking 70 958 21.9 70 213 20.0

Corporate & Investment Banking 58 038 19.3 51 926 22.0

Central and other 8 183 (10.7) 12 356 (10.1)

Banking activities 137 179 18.8 134 495 18.0

Other banking interests 7 439 5.6 7 754 7.3

Liberty 10 519 15.2 11 279 12.7

Standard Bank Group 155 137 18.0 153 528 17.1

Cost of equity estimates1

Average Average

2018 2017

% %

Standard Bank Group 14.0 13.9

Banking activities 14.0 14.01 Estimated using the capital asset pricing model, by applying estimates of risk free rate, 8.9% (2017: 8.8%), equity risk premium, 6.3% (2017: 6.4%) and beta 80.0% (2017:

79.2%). Beta for banking activities estimated at 81.2% (2017: 80.8%).

Economic returnsChange 2018 2017

% Rm Rm

Average ordinary shareholders' equity 1 155 137 153 528

Headline earnings 6 27 865 26 270

Cost of equity charge 2 (21 719) (21 340)

Economic return 25 6 146 4 930

Return on ordinary shareholders’ equity – groupCAGR (2013 – 2018): 5%

2013 2014 2015 2016 2017 2018

120 132 142 150 154 155

14.2 13.0 15.6 15.3 17.1 18.0

0

40

80

120

160

200

Rbn %

20

16

12

8

4

0

Average equityReturn on equity (ROE)

64


Currency translation effects and economic capital

Movement in group foreign currency translation and net investment hedging reserve2018 2017

Rm Rm

Balance at beginning of the period: debit (7 099) (2 126)

Translation and hedge reserve increase/(decrease) for the period 4 316 (4 759)

Translation reserve increase/(decrease) 4 480 (4 713)

Africa Regions 3 056 (3 078)

International 1 301 (1 578)

Liberty 123 (57)

Currency hedge losses (164) (46)

Movement due to disposal and liquidation of entities (214)

Balance at end of the period: debit (2 783) (7 099)

Economic capital utilisation by risk typeChange 2018 2017

% Rm Rm

Credit risk 13 83 422 73 784

Equity risk 12 7 730 6 912

Market risk (18) 1 035 1 269

Operational risk 8 14 163 13 133

Business risk (6) 3 882 4 113

Interest rate risk in the banking book 7 4 197 3 908

Economic capital requirement 11 114 429 103 119

Available financial resources 11 166 992 150 726

Economic capital coverage ratio (times) 1.46 1.46

Economic capital utilisation by business unit Change 2018 2017

% Rm Rm



Other banking interests and other 73 10 971 6 342

Economic capital requirement 11 114 429 103 119


Risk-weighted assets and total assets (closing balances)

Rbn %

1 Banking activities and other banking interest.

0

440

880

1 320

1 760

2 200

2013 2014 2015 2016 2017 2018

50 48 48 45 47 51

RWA as a percentage of total assets

0

12

24

36

48

60

841 915 944 883 957 1 080

Risk-weighted assets (RWA)

1 694 1 907 1 981 1 952 2 028 2 127

Total assets1

Risk-weighted assets

By business unit and risk typeChange 2018 2017

% Rm Rm


Credit risk 9 336 135 308 532


Market risk (39) 44 72

Equity risk in the banking book 33 1 581 1 189


Credit risk 13 363 809 321 694

Counterparty credit risk 12 27 338 24 350

Market risk 17 70 435 59 949



Central and other 30 102 729 78 731

Credit risk 51 45 043 29 785

Operational risk (19) 3 826 4 698

Equity risk in the banking book (3) 3 473 3 566

RWA for investments in financial entities1 24 50 387 40 682

Standard Bank Group 13 1 079 642 957 046

By risk typeChange 2018 2017

% Rm Rm

Credit risk 13 744 987 660 011


Market risk 17 70 479 60 021




Standard Bank Group 13 1 079 642 957 0461 Including phase-in of IFRS 9 transitional adjustment.

Risk-weighted assets (RWA) by business unit(closing balances)CAGR (2013 – 2018): Personal & Business Banking 6% Corporate & Investment Banking 3% Central and other 13%

Rbn

Personal & Business BankingCorporate & Investment Banking Central and other

2013 2014 2015 2016 2017 2018

320 368 390 394 403 438

464 479 475 413 475 539

57 68 79 76 79 103

0

240

480

720

960

1 200

66


Return on risk-weighted assets

1 Average RWA calculated net of non-controlling interests.

Return on risk-weighted assets

PBB return on average RWA

Rbn

2013 2014 2015 2016 2017 2018

298 330 352 369 382 396

2.8 3.0 3.2 3.5 3.7 3.9

Average RWA1 Return on average RWA

%

0

100

200

300

400

500 4.0

3.2

2.4

1.6

0.8

0

Banking activities return on average RWA

Rbn

2013 2014 2015 2016 2017 2018

789 803 800 817 829 901

1.9 1.8 2.5 2.7 2.9 2.9


%

1 000

800

600

400

200

0

5.0

4.0

3.0

2.0

1.0

0

SBG return on average RWA

Rbn

2013 2014 2015 2016 2017 2018

803 821 819 839 846 923

2.1 2.1 2.7 2.7 3.1 3.0


%

1 000

800

600

400

200

0

5.0

4.0

3.0

2.0

1.0

0

CIB return on average RWA

Rbn

2013 2014 2015 2016 2017 2018

450 431 397 401 394 445

1.5 1.2 2.0 2.6 2.9 2.5


%

0

100

200

300

400

500 4.0

3.2

2.4

1.6

0.8

0


Capital adequacy

Qualifying regulatory capital excluding unappropriated profitChange 2018 2017

% Rm Rm

Ordinary shareholders' equity 5 165 061 157 020

Qualifying non-controlling interest 11 5 451 4 892

Regulatory adjustments (24) (24 628) (32 326)

Goodwill 16 (2 208) (1 904)

Other intangible assets (5) (17 703) (18 603)

Shortfall of credit provisions to expected future losses2 (100) (2 076)

Investments in financial entities (6) (8 616) (9 141)

Other adjustments including IFRS 9 phase-in (>100) 3 899 (602)

Total common equity tier 1 capital (including unappropriated profit) 13 145 884 129 586

Unappropriated profit 3 (11 643) (11 304)

Common equity tier 1 capital 13 134 241 118 282

Qualifying other equity instruments (9) 5 702 6 291

Qualifying non-controlling interest (7) 385 416

Tier 1 capital 12 140 328 124 989

Qualifying tier 2 subordinated debt 19 17 545 14 777

General allowance for credit impairments 28 2 776 2 173

Tier 2 capital 20 20 321 16 950

Total regulatory capital 13 160 649 141 9392 For reporting periods up to 31 December 2017, the group deducted from available capital the shortfall of IAS 39 credit provisions to regulatory expected loss. Given that the

IFRS 9 impairment provisions are greater than the regulatory expected losses, this adjustment is no longer recognised.

Capital adequacy ratios (phased-in)1

Internaltarget

ratios3

SARB minimum

regulatory require-

ment4

Excluding unappropriated profit

Including unappropriated profit

2018 2017 2018 2017

% % % % % %

Common equity tier 1 capital adequacy ratio 11.0 - 12.5 7.4 12.4 12.4 13.5 13.5

Tier 1 capital adequacy ratio 12.0 - 13.0 8.9 13.0 13.1 14.1 14.2

Total capital adequacy ratio 15.0 - 16.0 11.1 14.9 14.8 16.0 16.03 Including unappropriated profit.4 Excluding confidential bank specific requirements.

1 Capital adequacy ratios based on the SARB IFRS 9 phased-in approach.

Capital adequacy1

(including unappropriated profit)

%

2013 2014 2015 2016 2017 2018

16.2 15.5 15.7 16.6 16.0 16.0

Total regulatory capitalTier 1 capital

13.2 12.9 13.3 14.3 14.2 14.1

Common equity tier 1 capital

0

4

8

12

16

20

12.6 12.4 12.9 13.9 13.5 13.5

68


Capital adequacy ratios (fully loaded)1

Internaltargetratios2

SARB minimum

regulatory require-

ment3



2018 2017 2018 2017

% % % % % %



Total capital adequacy ratio 15.0 - 16.0 11.1 14.7 14.8 15.8 16.01 Capital ratios based on the inclusion of the full IFRS 9 transitional impact.2 Including unappropriated profit.3 Excluding confidential bank specific requirements.

Capital adequacy ratios per legal entity1

2018 2017

Tier 1 host regulatory

requirement

Total host regulatory

requirementTier 1

capitalTotal

capitalTier 1

capitalTotal

capital

% % % % % %

Standard Bank Group 8.9 11.1 14.1 16.0 14.2 16.0

The Standard Bank of South Africa Group (SBSA Group) 8.9 11.1 13.3 15.7 14.2 16.6

Africa Regions

Stanbic Bank Botswana 7.5 15.0 8.5 17.3 9.8 19.1

Stanbic Bank Ghana 10.0 17.8 20.5 20.0 23.4

Stanbic Bank Kenya 12.5 14.5 14.3 17.1 15.6 17.1

Stanbic Bank S.A. (Ivory Coast)2 8.0 71.6 71.6 >100 >100

Stanbic Bank Tanzania 12.5 14.5 14.7 16.7 17.0 18.8

Stanbic Bank Uganda 10.0 12.0 16.1 18.7 17.8 20.7

Stanbic Bank Zambia 5.0 10.0 15.7 18.3 16.6 19.1

Stanbic Bank Zimbabwe 8.0 12.0 21.4 23.9 22.0 24.6

Stanbic IBTC Bank Nigeria 10.0 17.2 21.5 16.2 20.5

Standard Bank de Angola 10.0 27.3 32.4 28.5 33.3

Standard Bank Malawi 10.0 15.0 19.5 21.7 16.8 20.3

Standard Bank Mauritius 8.0 11.9 24.1 25.0 31.4 32.0

Standard Bank Mozambique 9.0 18.0 19.4 18.9 20.4

Standard Bank Namibia 7.0 10.0 10.4 12.7 10.9 13.8

Standard Bank RDC (DRC - Congo)3 7.0 10.0 27.9 30.4 79.1 92.4

Standard Bank Swaziland 4.0 8.0 9.8 13.9 11.9 14.1

Standard Lesotho Bank 4.0 8.0 21.7 16.4 23.1 16.3

International

Standard Bank Isle of Man 8.5 11.5 21.2 21.2 12.6 13.7

Standard Bank Jersey 11.0 20.5 14.1

Capital adequacy ratio - times covered

Standard Insurance Limited (SIL)4

Solvency capital requirement coverage ratio 1.95

Liberty Group Limited4

Solvency capital requirement coverage ratio 1.87

1 IFRS 9 transitional impact phased-in according to local regulatory requirements or elections for SBG, SBSA, Kenya, Zambia, Botswana and Tanzania.2 Stanbic Bank S.A. (Ivory Coast) commenced operations in July 2017. Capital adequacy ratios are reflective of the start-up stage of the business.3 2017 capital adequacy ratios in anticipation of increased minimum requirements in 2018.4 Calculated in terms of the Insurance Act, 2017, which came into effect on 1 July 2018.


Subordinated debt2018 2017

Redeemable/ repayable First callable

Notional value1

Carrying value1

Notional value1

Carrying value1

Notional value1

date date LCm Rm Rm Rm Rm

Subordinated debt - banking activities

Standard Bank Group Limited 5 057 5 000

SBT 2012 13 Feb 2028 13 Feb 2023 ZAR 3 000 3 041 3 000

SBT 2022 3 Dec 2028 3 Dec 2023 ZAR 1 516 1 528 1 516

SBT 2032 3 Dec 2028 3 Dec 2023 ZAR 484 488 484

SBSA Group 13 793 13 580 17 287 17 080

SBK 16 15 Mar 2023 15 Mar 2018 ZAR 2 000 2 008 2 000

SBK 9 10 Apr 2023 10 Apr 2018 ZAR 1 500 1 529 1 500

SBK 17 30 Jul 2024 30 Jul 2019 ZAR 2 000 2 032 2 000 2 032 2 000

SBK 19 24 Oct 2024 24 Oct 2019 ZAR 500 509 500 509 500

SBK 202 2 Dec 2024 2 Dec 2019 ZAR 2 250 2 269 2 250 2 268 2 250

SBK 212 28 Jan 2025 28 Jan 2020 ZAR 750 764 750 763 750

SBK 222 28 May 2025 28 May 2020 ZAR 1 000 1 010 1 000 1 010 1 000

SBK 242 19 Oct 2025 19 Oct 2020 ZAR 880 899 880 899 880

SBK 18 24 Oct 2025 24 Oct 2020 ZAR 3 500 3 563 3 500 3 563 3 500

SBK 252 25 Apr 2026 25 Apr 2021 ZAR 1 200 1 225 1 200 1 225 1 200

SBK 262 25 Apr 2026 25 Apr 2021 ZAR 500 511 500 506 500

SBK 232 28 May 2027 28 May 2022 ZAR 1 000 1 011 1 000 975 1 000

Standard Bank Swaziland 29 Jun 2028 30 Jun 2023 E 100 105 100 50 50

Stanbic Botswana 15 Jun 2027 16 Jun 2022 BWP 200 269 268 239 239

Standard Bank Mozambique 2025 2020 MZN 1001 250 234 227 210

Stanbic Bank Kenya 8 Dec 2021 1 Jun 2020 KES 4 000 565 565 476 477

Stanbic IBTC Bank Nigeria 30 Sept 2024 01 Oct 2019 NGN 15 440 633 617 540 529

Standard Bank Namibia 23 Oct 2024 24 Oct 2019 NAD 100 102 100 101 100

Stanbic Bank Zambia 31 Oct 2024 1 Nov 2019 ZMK 37 45 45 46 46

Subordinated debt issued to group companies (122) (120) (253) (248)

Total subordinated debt - banking activities 20 697 20 389 18 713 18 483

Liberty (qualifying as regulatory insurance capital) 2017 - 2024 ZAR 5 500 5 662 5 500 5 576 5 500

Total subordinated debt 26 359 25 889 24 289 23 9831 The difference between the carrying and notional value represents accrued interest together with, where applicable, the unamortised fair value adjustments relating to bonds

hedged for interest rate risk.2 Basel III compliant tier 2 instruments which contain a contractual non-viability write-off feature.

Other equity holders2018 2017

Firstcallable

Notional value

Carrying value

Notional value

Carrying value

Notional value

date LCm Rm Rm Rm Rm

Cumulative preference share capital (SBKP) ZAR 8 8 8 8 8

Non-Cumulative preference share capital (SBPP) ZAR 1 5 495 1 5 495 1

Total preference share capital 5 503 9 5 503 9

SBT 101 31 Mar 2022 ZAR 1 744 1 744 1 744 1 744 1 744

SBT 102 30 Sep 2022 ZAR 1 800 1 800 1 800 1 800 1 800

Total AT1 capital bonds 3 544 3 544 3 544 3 544

Total other equity instruments 9 047 3 553 9 047 3 553

Other capital instruments

70


KEY BANKING LEGAL ENTITY INFORMATION THE STANDARD BANK OF SOUTH AFRICA

72 Key financial results, ratios and statistics

74 Income statement


76 Credit impairment charges

78 Balance sheet impairment roll forward for loans and advances


86 Risk-weighted assets

87 Capital adequacy

88 Market share analysis

AFRICA REGIONS LEGAL ENTITIES

90 Regional income statement


STANDARD BANK GROUP

94 Headline earnings and net asset value reconciliation by key legal entity

The Standard Bank of South Africa GroupKey financial results, ratios and statistics

Change

% 2018 20171

SBSA Group2

Income statement

Headline earnings Rm (1) 15 971 16 078

Headline earnings as consolidated into SBG3 Rm (3) 16 021 16 528

Profit attributable to the ordinary shareholder Rm (2) 15 695 15 941

Statement of financial position

Ordinary shareholder's equity Rm (3) 97 650 100 791

Total assets Rm 4 1 360 262 1 308 800

Net loans and advances Rm 3 931 659 900 895

Financial performance

ROE % 16.7 16.6

Non-interest revenue to total income % 43.0 40.7

Loans-to-deposits ratio % 92.0 93.6


Credit loss ratio on loans to customers % 0.65 0.86


Jaws % (3.5) 0.3

Effective total taxation rate % 25.9 26.0



Capital adequacy

Total risk-weighted assets Rm 10 669 386 610 314

Common equity tier 1 capital adequacy ratio4 % 12.7 13.6

Tier 1 capital adequacy ratio4 % 13.3 14.2

Total capital adequacy ratio4 % 15.7 16.6

SBSA company2

Headline earnings Rm (2) 14 872 15 211

Headline earnings as consolidated into SBG3 Rm (5) 14 922 15 661

Total assets Rm 4 1 359 504 1 305 112

ROE % 16.1 15.91 Restated. Refer to page 99.2 SBSA Group is a consolidation of entities including subsidiaries as well as structured entities, whereas SBSA company is a legal entity.3 At an SBSA level, certain share-based payment schemes are accounted for on a cash-settled basis, but at a consolidated SBG level they are accounted for on an equity-settled

basis. In addition, the hedges of those share schemes are recognised in the income statement at an SBSA level and in equity at an SBG level. Given the fluctuation in the SBG share price, it is considered appropriate to also reflect SBSA's headline earnings as consolidated into SBG.

4 Represents the ratio after applying the SARB phase-in provision for IFRS 9. Refer to page 87 for details regarding the fully loaded ratios.

72

STANDARD BANK GROUP ANALYSIS OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 KEY BANKING LEGAL ENTITY INFORMATION

Key highlights�� Net interest income was adversely impacted by the change in

accounting treatment of interest in suspense for pre-legal and cured loan balances under IFRS 9, negative endowment on the back of lower average prime interest rate and margin compression as a result of the competitive environment.

�� Net fee and commission revenue benefited from annual fee increases and higher electronic banking volumes, particularly relating to ATM usage as well as Instant Money and Business Online transactions. A decline was noted in physical channel volumes (as customers opted to use digital platforms) impacted fee growth.

�� Trading revenue was flat year on year due to lower fixed income and currency revenue on the back of negative emerging market sentiment and lower investor flows and deal volumes.

�� Higher dividends received from equity trading positions.

�� Increase in revenue from the Bancassurance agreement with Liberty.

�� Interest income on certain debt instruments, together with the derecognition gains and losses on instruments not recognised at fair value through profit and loss, are now recorded in other gains and losses on financial instruments, in accordance with IFRS 9.

�� Credit impairment charges were positively impacted by the reallocation of interest in suspense for pre-legal and cured loan balances in PBB following the implementation of IFRS 9, higher post write-off recoveries and improved book quality across all products. This was offset by credit impairment charges raised on retail and construction sector clients in CIB driven by a contracting economic environment.

�� Increase in staff costs attributable to annual salary increases and separation costs in the information technology business, partly offset by a decline in headcount.

�� Other operating expenses growth mainly driven by inflation, offset by deliberate actions to contain costs while still investing in technology to improve the client experience and support digitisation.


2013 2014 2015 2016 2017 2018

11 461 10 709 13 376 14 599 16 078 15 971

14.4 15.1 15.5 15.8 16.6 16.7

Rm %

20

16

12

8

4

0

Headline earningsReturn on equity

20 000

16 000

12 000

8 000

4 000

0

Net loans and advances CAGR (2013 – 2018): 6%

Rbn

2013 2014 2015 2016 2017 2018

705 785 897 920 901 932

0

200

400

600

800

1 000

73

The Standard Bank of South Africa GroupIncome statement

Group Company

Change 2018 20171 Change 2018 20171

% Rm Rm % Rm Rm

Net interest income (4) 39 831 41 520 (4) 38 616 40 434


Net fee and commission revenue 4 21 185 20 356 4 20 096 19 248

Trading revenue 0 5 358 5 344 0 5 357 5 345

Other revenue 5 2 922 2 780 3 3 049 2 950

Other gains and losses on financial instruments 100 522 100 522

Total income 0 69 818 70 000 (0) 67 640 67 977

Credit impairment charges (22) (5 557) (7 145) (21) (5 569) (7 092)

Loans and advances (24) (5 425) (7 145) (23) (5 437) (7 092)

Financial investments (100) (7) (100) (7)

Letters of credit and guarantees and other (100) (125) (100) (125)

Net income before revenue sharing agreements 2 64 261 62 855 2 62 071 60 885

Revenue sharing agreements with group companies (1) (722) (726) (1) (722) (726)

Income before operating expenses 2 63 539 62 129 2 61 349 60 159

Operating expenses 3 (41 660) (40 372) 3 (40 724) (39 423)

Staff costs 4 (22 928) (22 038) 4 (22 404) (21 549)

Other operating expenses 2 (18 732) (18 334) 2 (18 320) (17 874)

Net income before non-trading and capital related items, and equity accounted earnings 1 21 879 21 757 (1) 20 625 20 736

Non-trading and capital related items >100 (383) (191) >100 (383) (191)

Share of profits from associates and joint ventures (31) 129 187 (31) 129 187

Profit before indirect taxation (1) 21 625 21 753 (2) 20 371 20 732

Indirect taxation 9 (1 418) (1 301) 9 (1 412) (1 295)

Profit before direct taxation (1) 20 207 20 452 (2) 18 959 19 437

Direct taxation (4) (4 190) (4 347) (4) (4 041) (4 198)

Profit for the year (1) 16 017 16 105 (2) 14 918 15 239

Attributable to other equity instrument holders 95 (322) (165) 95 (322) (165)

Attributable to non-controlling interests (100) 1

Attributable to the ordinary shareholder (2) 15 695 15 941 (3) 14 596 15 074

Headline adjustable items >100 276 137 >100 276 137

Headline earnings (1) 15 971 16 078 (2) 14 872 15 211

IFRS 2 adjustment

Staff costs net of taxation (89) 50 450 (89) 50 450

Headlines earnings as consolidated into SBG2 (3) 16 021 16 528 (5) 14 922 15 6611 Restated. Refer to page 99.2 At an SBSA level, the share-based payment schemes are accounted for on a cash-settled basis, but at a consolidated SBG level they are accounted for on an equity-settled

basis. Given the fluctuation in the SBG share price, it is considered appropriate to also reflect SBSA’s headline earnings as consolidated into SBG.

74


The Standard Bank of South Africa GroupStatement of financial position

Group Company

Change 2018 2017 Change 2018 2017

% Rm Rm % Rm Rm

AssetsCash and balances with central banks (4) 34 536 35 893 (4) 34 536 35 893

Derivative assets (35) 46 707 71 542 (35) 46 707 71 542

Trading assets 22 153 894 126 283 22 153 590 126 283

Pledged assets (90) 674 6 812 (90) 674 6 812

Financial investments 22 105 438 86 344 23 105 438 85 877

Loans and advances 3 931 659 900 895 4 919 380 884 648

Loans and advances to banks (17) 76 422 91 610 (10) 82 283 90 990

Loans and advances to customers 6 855 237 809 285 5 837 097 793 658

Other assets (13) 7 668 8 837 (13) 7 480 8 628

Interest in group companies, associates and joint ventures 14 52 296 46 000 9 64 424 59 354

Property and equipment 22 10 284 8 448 22 10 262 8 423

Goodwill and other intangible assets (4) 17 106 17 746 (4) 17 013 17 652

Total assets 4 1 360 262 1 308 800 4 1 359 504 1 305 112

Equity and liabilitiesEquity (3) 101 200 104 338 (4) 97 583 101 690

Equity attributable to ordinary shareholders (3) 97 650 100 791 (4) 94 039 98 146

Ordinary share capital 0 60 60 0 60 60

Ordinary share premium 2 44 388 43 638 2 44 388 43 638

Reserves (7) 53 202 57 093 (9) 49 591 54 448

Equity attributable to other equity holders 0 3 544 3 544 0 3 544 3 544

Equity attributable to non-controlling interest 100 6 3

Liabilities 5 1 259 062 1 204 462 5 1 261 921 1 203 422

Derivative liabilities (32) 49 546 72 989 (32) 49 546 72 989

Trading liabilities (22) 29 704 38 240 (22) 29 698 38 240

Deposits and debt funding 5 1 012 246 962 920 5 1 011 763 961 650

Deposits from banks 18 95 186 80 617 18 95 069 80 610

Deposits from customers 4 917 060 882 303 4 916 694 881 040

Subordinated debt (20) 13 793 17 287 (20) 13 793 17 287

Liabilities to group companies 42 135 301 95 416 45 139 370 95 927

Provisions and other liabilities 5 18 472 17 610 2 17 751 17 329

Total equity and liabilities 4 1 360 262 1 308 800 4 1 359 504 1 305 112

75

The Standard Bank of South Africa GroupCredit impairment charges

Credit impairment charges on loans and advancesCAGR (2013 – 2018): (7)%

Rm %

0

1 600

3 200

4 800

6 400

8 000

0

0.24

0.48

0.72

0.96

1.20

2013 2014 2015 2016 2017 2018

7 815 7 876 7 385 7 024 7 145 5 425

1.11 1.04 0.84 0.75 0.77 0.59

Credit impairment chargesCredit loss ratio

Income statement credit impairment charges for loans and advances2018 2017


Total stage 1

and 2 Stage 31

Totalimpairment

charges

Creditloss

ratio

Portfoliocredit

impairmentcharges

Total specific

impairment charges

Totalimpairment

charges

Creditloss

ratio


Personal & Business Banking (28) (247) 10 (237) 4 781 4 544 0.83 (172) 6 479 6 307 1.19

Mortgage loans (46) (102) 25 (77) 861 784 0.24 (69) 1 527 1 458 0.45

Vehicle and asset finance (15) 3 (67) (64) 601 537 0.72 (99) 733 634 0.88

Card debtors (29) (52) 219 167 794 961 2.98 63 1 297 1 360 4.33



Business lending and other (14) (173) (109) (282) 1 033 751 1.14 (53) 925 872 1.44

Corporate & Investment Banking 5 50 (713) (663) 1 544 881 0.23 521 317 838 0.22

Corporate and sovereign banking 60 (718) (658) 1 544 886 0.29 521 317 838 0.28

Bank lending (10) 5 (5) (5) (0.01)

Total credit impairment charges - loans and advances (24) (197) (703) (900) 6 325 5 425 0.59 349 6 796 7 145 0.77

Credit impairment charges - financial investments 7

Credit impairment charges - letters of credit and guarantees 125

Total credit impairment charges 5 557 7 1451 Includes post write-off recoveries and modification gains and losses.

76


Income statement credit impairment charges for loans and advances2018 2017


Total stage 1

and 2 Stage 31

Totalimpairment

charges

Creditloss

ratio

Portfoliocredit

impairmentcharges

Total specific

impairment charges

Totalimpairment

charges

Creditloss

ratio


Personal & Business Banking (28) (247) 10 (237) 4 781 4 544 0.83 (172) 6 479 6 307 1.19

Mortgage loans (46) (102) 25 (77) 861 784 0.24 (69) 1 527 1 458 0.45

Vehicle and asset finance (15) 3 (67) (64) 601 537 0.72 (99) 733 634 0.88

Card debtors (29) (52) 219 167 794 961 2.98 63 1 297 1 360 4.33



Business lending and other (14) (173) (109) (282) 1 033 751 1.14 (53) 925 872 1.44

Corporate & Investment Banking 5 50 (713) (663) 1 544 881 0.23 521 317 838 0.22

Corporate and sovereign banking 60 (718) (658) 1 544 886 0.29 521 317 838 0.28

Bank lending (10) 5 (5) (5) (0.01)

Total credit impairment charges - loans and advances (24) (197) (703) (900) 6 325 5 425 0.59 349 6 796 7 145 0.77

Credit impairment charges - financial investments 7

Credit impairment charges - letters of credit and guarantees 125

Total credit impairment charges 5 557 7 1451 Includes post write-off recoveries and modification gains and losses.

77

The Standard Bank of South Africa GroupBalance sheet impairment roll forward for loans and advances

1 January 2018 IFRS 9

opening balance

Transfer between

stages


released

Impaired accounts

written off



2018 closing balance

2018 recoveries of amounts written off

net of modification losses


2018Total expected credit loss

Personal & Business Banking 22 870 5 165 (5 462) 938 23 511 621

Mortgage lending 8 767 885 (896) 609 9 365 101

Vehicle and asset finance 2 568 781 (703) 78 2 724 244

Card debtors 3 052 1 172 (1 302) 63 2 985 211



Business lending and other 2 979 755 (733) 103 3 104 4

Corporate & Investment Banking 5 034 893 (876) 440 5 491 12

Corporate and sovereign lending 5 017 898 (876) 442 5 481 12

Bank lending 17 (5) (2) 10

Total 27 904 6 058 (6 338) 1 378 29 002 6331 Currency translation and other movements includes the movement in the interest in suspense provision.

Net provisions raised and released less recoveries net of modification losses is equal to the income statement credit impairment charge (2018: R6 058 million - R633 million = R5 425 million).


opening balance

Transfer between

stages


released

Impaired accounts

written off







Stage 3 and purchased and originated credit impaired

Personal & Business Banking 13 824 (326) 5 860 (5 462) 931 14 827 753


Vehicle and asset finance 1 111 51 794 (703) 78 1 331 244

Card debtors 1 612 (68) 1 113 (1 302) 63 1 418 251

Other loans and advances 5 220 (15) 2 637 (2 561) 181 5 462 97

Personal unsecured lending 3 492 (66) 1 651 (1 828) 78 3 327 93

Business lending and other 1 728 51 986 (733) 103 2 135 4

Corporate & Investment Banking 3 343 510 1 046 (876) 375 4 398 12

Corporate lending 3 343 510 1 046 (876) 375 4 398 12

Total 17 167 184 6 906 (6 338) 1 306 19 225 7651 Currency translation and other movements includes the movement in the interest in suspense provision.

Net provisions raised and released and transfer between stages less recoveries net of modification losses is equal to the income statement credit impairment charge (2018: R6 906 million + R184 million - R765 million = R6 325 million).

78



opening balance

Transfer between

stages


released

Impaired accounts

written off







2018Total expected credit loss

Personal & Business Banking 22 870 5 165 (5 462) 938 23 511 621

Mortgage lending 8 767 885 (896) 609 9 365 101

Vehicle and asset finance 2 568 781 (703) 78 2 724 244

Card debtors 3 052 1 172 (1 302) 63 2 985 211



Business lending and other 2 979 755 (733) 103 3 104 4

Corporate & Investment Banking 5 034 893 (876) 440 5 491 12

Corporate and sovereign lending 5 017 898 (876) 442 5 481 12


Total 27 904 6 058 (6 338) 1 378 29 002 6331 Currency translation and other movements includes the movement in the interest in suspense provision.

Net provisions raised and released less recoveries net of modification losses is equal to the income statement credit impairment charge (2018: R6 058 million - R633 million = R5 425 million).


opening balance

Transfer between

stages


released

Impaired accounts

written off







Stage 3 and purchased and originated credit impaired

Personal & Business Banking 13 824 (326) 5 860 (5 462) 931 14 827 753


Vehicle and asset finance 1 111 51 794 (703) 78 1 331 244

Card debtors 1 612 (68) 1 113 (1 302) 63 1 418 251

Other loans and advances 5 220 (15) 2 637 (2 561) 181 5 462 97

Personal unsecured lending 3 492 (66) 1 651 (1 828) 78 3 327 93

Business lending and other 1 728 51 986 (733) 103 2 135 4

Corporate & Investment Banking 3 343 510 1 046 (876) 375 4 398 12

Corporate lending 3 343 510 1 046 (876) 375 4 398 12

Total 17 167 184 6 906 (6 338) 1 306 19 225 7651 Currency translation and other movements includes the movement in the interest in suspense provision.

Net provisions raised and released and transfer between stages less recoveries net of modification losses is equal to the income statement credit impairment charge (2018: R6 906 million + R184 million - R765 million = R6 325 million).

79


opening balance

Transfer between

stages


released

Impaired accounts

written off


and other movements






Mortgage lending 1 819 (161) 126 1 784 (60)

Vehicle and asset finance 752 (319) 252 685

Card debtors 768 (108) 287 947 (40)

Other loans and advances 1 466 (396) 197 7 1 274 (32)

Personal unsecured lending 969 (109) 19 7 886 (32)

Business lending and other 497 (287) 178 388

Corporate & Investment Banking 1 122 (641) (72) 31 440

Corporate and sovereign lending 1 122 (641) (77) 31 435

Bank lending 5 5

Total 5 927 (1 625) 790 38 5 130 (132)Net provisions raised and released and transfer between stages less recoveries net of modification losses is equal to the income statement credit impairment charge (2018: R790 million + (R1 625 million) - (R132 million) = (R703 million)).


opening balance

Transfer between

stages


released

Impaired accounts

written off


and other movements





Stage 1Personal & Business Banking 4 241 1 310 (1 557) 3 994

Mortgage lending 1 067 455 (557) 965

Vehicle and asset finance 705 268 (265) 708

Card debtors 672 176 (228) 620

Other loans and advances 1 797 411 (507) 1 701

Personal unsecured lending 1 043 175 (98) 1 120

Business lending and other 754 236 (409) 581

Corporate & Investment Banking 569 131 (81) 34 653

Corporate and sovereign lending 552 131 (71) 36 648


Total 4 810 1 441 (1 638) 34 4 647Net provisions raised and released and transfer between stages is equal to the income statement credit impairment charge (2018: (R1 638 million) + R1 441 million = (R197 million)).


80



opening balance

Transfer between

stages


released

Impaired accounts

written off


and other movements






Mortgage lending 1 819 (161) 126 1 784 (60)

Vehicle and asset finance 752 (319) 252 685

Card debtors 768 (108) 287 947 (40)

Other loans and advances 1 466 (396) 197 7 1 274 (32)

Personal unsecured lending 969 (109) 19 7 886 (32)

Business lending and other 497 (287) 178 388

Corporate & Investment Banking 1 122 (641) (72) 31 440

Corporate and sovereign lending 1 122 (641) (77) 31 435

Bank lending 5 5

Total 5 927 (1 625) 790 38 5 130 (132)Net provisions raised and released and transfer between stages less recoveries net of modification losses is equal to the income statement credit impairment charge (2018: R790 million + (R1 625 million) - (R132 million) = (R703 million)).


opening balance

Transfer between

stages


released

Impaired accounts

written off


and other movements





Stage 1Personal & Business Banking 4 241 1 310 (1 557) 3 994

Mortgage lending 1 067 455 (557) 965

Vehicle and asset finance 705 268 (265) 708

Card debtors 672 176 (228) 620

Other loans and advances 1 797 411 (507) 1 701

Personal unsecured lending 1 043 175 (98) 1 120

Business lending and other 754 236 (409) 581


Corporate and sovereign lending 552 131 (71) 36 648


Total 4 810 1 441 (1 638) 34 4 647Net provisions raised and released and transfer between stages is equal to the income statement credit impairment charge (2018: (R1 638 million) + R1 441 million = (R197 million)).

81

2017 Opening balance

IAS 39 discount in opening

balance


released

IAS 39 discount in new

impairments raised

Impaired accounts

written off

IAS 39 discount recycled to net interest

income

Currency translation and

other movements


IAS 39 discount in

closing balance

2017Recoveries of

amounts writtenoff in previous

years


2017Total credit impairments

Personal & Business Banking 14 602 728 6 830 681 (6 006) (726) (120) 14 580 683 523

Mortgage lending 4 508 383 1 642 317 (1 105) (315) 4 730 385 184

Vehicle and asset finance 1 834 75 841 99 (935) (98) 1 642 76 207

Card debtors 2 208 19 1 440 23 (1 349) (26) (51) 2 222 16 80



Business lending and other 1 927 59 903 61 (559) (56) 2 215 64 31

Corporate & Investment Banking 3 093 34 838 89 (81) (58) (211) 3 581 65

Corporate loans 2 841 30 868 89 (57) (53) (232) 3 367 66

Commercial property finance 252 4 (30) (24) (5) 21 214 (1)


Total credit impairments 18 096 762 7 668 770 (6 087) (784) (331) 18 562 748 523




Card debtors 1 567 19 1 377 23 (1 349) (26) (5) 1 564 16 80





Corporate loans 2 254 30 347 89 (57) (53) (148) 2 343 66


Total specific credit impairments 12 760 762 7 319 770 (6 087) (784) (201) 13 007 748 523


Mortgage lending 1 061 (69) 992

Vehicle and asset finance 711 (99) 612

Card debtors 641 63 (46) 658

Other loans and advances 1 839 (67) 1 772

Personal unsecured lending 1 082 (14) 1 068

Business lending and other 757 (53) 704


Corporate loans 587 521 (84) 1 024

Commercial property finance 96 96


Total portfolio credit impairments 5 336 349 (130) 5 555Net provisions raised less recoveries on the amounts written off in previous periods equal to the income statement credit impairment charge (2017: R7 668 million - R523 million = R7 145 million).


82


2017 Opening balance

IAS 39 discount in opening

balance


released

IAS 39 discount in new

impairments raised

Impaired accounts

written off

IAS 39 discount recycled to net interest

income

Currency translation and

other movements


IAS 39 discount in

closing balance

2017Recoveries of

amounts writtenoff in previous

years


2017Total credit impairments

Personal & Business Banking 14 602 728 6 830 681 (6 006) (726) (120) 14 580 683 523



Card debtors 2 208 19 1 440 23 (1 349) (26) (51) 2 222 16 80





Corporate loans 2 841 30 868 89 (57) (53) (232) 3 367 66



Total credit impairments 18 096 762 7 668 770 (6 087) (784) (331) 18 562 748 523




Card debtors 1 567 19 1 377 23 (1 349) (26) (5) 1 564 16 80





Corporate loans 2 254 30 347 89 (57) (53) (148) 2 343 66


Total specific credit impairments 12 760 762 7 319 770 (6 087) (784) (201) 13 007 748 523


Mortgage lending 1 061 (69) 992

Vehicle and asset finance 711 (99) 612

Card debtors 641 63 (46) 658

Other loans and advances 1 839 (67) 1 772

Personal unsecured lending 1 082 (14) 1 068

Business lending and other 757 (53) 704


Corporate loans 587 521 (84) 1 024

Commercial property finance 96 96


Total portfolio credit impairments 5 336 349 (130) 5 555Net provisions raised less recoveries on the amounts written off in previous periods equal to the income statement credit impairment charge (2017: R7 668 million - R523 million = R7 145 million).

83

Gross carrying

loans andadvances

SB 1 - 12 SB 13 - 20 SB 21 – 25

Total stage 1

and 2Total

stage 3

Securitiesand

expectedrecoverieson stage 3

exposureloans

Balancesheet



loans on stage 3

Gross stage 3

coverageStage 3




Mortgage loans 342 511 108 494 1 767 182 640 4 327 4 259 24 125 325 612 16 899 10 283 6 616 39 4.9


Card debtors 32 608 1 604 8 24 915 174 317 3 772 30 790 1 818 400 1 418 78 5.6


Personal unsecured lending 40 960 1 125 29 671 6 1 556 4 437 36 795 4 165 838 3 327 80 10.2


Corporate & Investment Banking 397 337 236 034 4 780 133 079 15 477 723 802 390 895 6 442 2 044 4 398 68 1.6

Corporate and sovereign lending 305 169 146 856 4 780 130 196 15 370 723 802 298 727 6 442 2 044 4 398 68 2.1

Bank lending 92 168 89 178 2 883 107 92 168

Gross loans and advances 959 693 365 141 6 576 479 117 22 526 8 930 41 411 923 701 35 992 16 767 19 225 53 3.8


Gross loans and advances at amortised cost 959 693

Gross loans and advances at fair value - CIB 968

Total gross loans and advances 960 661The group uses a 25-point master rating scale to quantify the credit risk for each borrower (corporate asset classes) or facility (specialised lending and retail asset classes). Ratings are mapped to PDs by means of calibration formulae that use historical default rates and other data from the applicable portfolio.

Grossloans andadvances

Totalperforming

loans

Total non-

performingloans



loans

Net after securities and

expected recoveries on


loans

Balance sheet



impaired loans

Specific gross

impairment coverage

Non-performing

loans



Mortgage loans 329 975 315 523 14 452 10 714 3 738 3 738 26 4.4


Card debtors 31 694 29 610 2 084 520 1 564 1 564 75 6.6


Personal unsecured lending 38 810 35 201 3 609 906 2 703 2 703 75 9.3



Corporate loans 293 148 289 749 3 399 1 056 2 343 2 343 69 1.2


Central and other 26 443 26 443

Gross loans and advances 919 457 890 598 28 859 15 852 13 007 13 007 45 3.1


The Standard Bank of South Africa GroupLoans and advances performance

84


Gross carrying

loans andadvances

SB 1 - 12 SB 13 - 20 SB 21 – 25

Total stage 1

and 2Total

stage 3

Securitiesand

expectedrecoverieson stage 3

exposureloans

Balancesheet



loans on stage 3

Gross stage 3

coverageStage 3




Mortgage loans 342 511 108 494 1 767 182 640 4 327 4 259 24 125 325 612 16 899 10 283 6 616 39 4.9


Card debtors 32 608 1 604 8 24 915 174 317 3 772 30 790 1 818 400 1 418 78 5.6


Personal unsecured lending 40 960 1 125 29 671 6 1 556 4 437 36 795 4 165 838 3 327 80 10.2


Corporate & Investment Banking 397 337 236 034 4 780 133 079 15 477 723 802 390 895 6 442 2 044 4 398 68 1.6

Corporate and sovereign lending 305 169 146 856 4 780 130 196 15 370 723 802 298 727 6 442 2 044 4 398 68 2.1

Bank lending 92 168 89 178 2 883 107 92 168

Gross loans and advances 959 693 365 141 6 576 479 117 22 526 8 930 41 411 923 701 35 992 16 767 19 225 53 3.8


Gross loans and advances at amortised cost 959 693

Gross loans and advances at fair value - CIB 968

Total gross loans and advances 960 661The group uses a 25-point master rating scale to quantify the credit risk for each borrower (corporate asset classes) or facility (specialised lending and retail asset classes). Ratings are mapped to PDs by means of calibration formulae that use historical default rates and other data from the applicable portfolio.

Grossloans andadvances

Totalperforming

loans

Total non-

performingloans



loans

Net after securities and

expected recoveries on


loans

Balance sheet



impaired loans

Specific gross

impairment coverage

Non-performing

loans



Mortgage loans 329 975 315 523 14 452 10 714 3 738 3 738 26 4.4


Card debtors 31 694 29 610 2 084 520 1 564 1 564 75 6.6


Personal unsecured lending 38 810 35 201 3 609 906 2 703 2 703 75 9.3



Corporate loans 293 148 289 749 3 399 1 056 2 343 2 343 69 1.2


Central and other 26 443 26 443

Gross loans and advances 919 457 890 598 28 859 15 852 13 007 13 007 45 3.1


85

The Standard Bank of South Africa GroupRisk-weighted assets1


Risk-weighted assets Change 2018 2017

% Rm Rm

Credit risk 8 467 820 433 611


Market risk 21 50 720 41 943




Total risk-weighted assets 10 669 386 610 3142 Including phase-in of the IFRS 9 transitional adjustment.


Capital adequacy – SBSA group1

(including unappropriated profit)

%

2013 2014 2015 2016 2017 2018

16.5 15.8 15.3 16,8 16.6 15.7

Total regulatory capitalTier 1 capital

12.8 12.3 12.1 13,7 14.2 13.3

Common equity tier 1 capital

0

4

8

12

16

20

12.8 12.3 12.1 13.7 13.6 12.7

86


The Standard Bank of South Africa GroupCapital adequacy

Qualifying regulatory capital excluding unappropriated profitChange 2018 2017

% Rm Rm

Share capital and premium 2 44 448 43 698

Retained earnings (7) 52 321 56 294

Other reserves 10 881 799

Regulatory adjustments (31) (12 420) (17 929)

Goodwill 0 (42) (42)

Other intangible assets (7) (14 337) (15 346)

Deferred tax assets (21) (11) (14)

Shortfall of provisions to expected losses1 (100) (2 084)

Other adjustments including IFRS 9 phase-in (>100) 1 970 (443)

Total (including unappropriated profit) 3 85 230 82 862

Unappropriated profits 9 (11 966) (11 010)

Common equity tier 1 capital 2 73 264 71 852

Qualifying other equity instruments (1) 3 504 3 544

Tier 1 capital 2 76 768 75 396

Qualifying tier 2 subordinated debt 9 18 580 17 080

General allowance for credit impairments 69 781 461

Regulatory adjustments - investment in tier 2 instruments in other banks 36 (3 187) (2 341)

Tier 2 capital 6 16 174 15 200

Total qualifying regulatory capital 3 92 942 90 5961 For reporting periods up to 31 December 2017, the group deducted from available capital the shortfall of IAS 39 credit provisions to regulatory expected loss. Given that the

IFRS 9 impairment provisions are greater than the regulatory expected losses, this adjustment is no longer recognised.

Capital adequacy ratios (phased-in)1

Internaltarget

ratios2

SARB minimum regulatory

requirement3



2018 2017 2018 2017

% % % % % %



Total capital adequacy ratio 15.0 - 16.0 11.1 13.9 14.8 15.7 16.61 Capital adequacy ratios based on the SARB IFRS 9 phased-in approach.2 Including unappropriated profit.3 Excluding confidential bank specific requirements.

Capital adequacy ratios (fully loaded)1

Internaltarget

ratios2

SARB minimumregulatory

requirement3



2018 2017 2018 2017

% % % % % %



Total capital adequacy ratio 15.0 - 16.0 11.1 13.9 14.8 15.7 16.61 Capital ratios based on the inclusion of the full IFRS 9 transitional impact.2 Including unappropriated profit.3 Excluding confidential bank specific requirements.

87

The Standard Bank of South AfricaMarket share analysis1

Vehicle and asset finance

%

2013 2014 2015 2016 2017 2018

Other

1.5 2.0 2.3 2.5 2.6 3.0

FirstRand

35.6 35.1 33.6 31.7 31.7 29.7

Nedbank

25.2 26.0 26.4 27.7 28.1 28.5

18.9 19.3 19.0 19.1 19.1 19.8

ABSA

18.8 17.6 18.7 19.0 18.5 19.0

SBSA

0

8

16

24

32

40

Card

%

2013 2014 2015 2016 2017 2018

Other

11.0 10.2 9.7 7.7 7.8 7.9

FirstRand

16.9 17.9 20.3 22.1 23.8 26.0

Nedbank

12.2 12.9 12.9 13.7 14.0 13.7

32.2 31.6 30.2 29.1 27.1 26.3

ABSA

27.7 27.4 26.9 27.4 27.3 26.1

SBSA

0

7

14

21

28

35

Mortgage loans2

%

2013 2014 2015 2016 2017 2018

Other

8.2 8.9 10.2 10.7 11.6 12.2

FirstRand

16.3 16.4 16.4 16.1 16.2 16.5

Nedbank

20.8 21.4 21,4 21.8 22.0 21.7

24.6 23.0 22.1 20.9 20.4 20.5

ABSA

0

7

14

21

28

35

30.1 30.3 29.9 30.5 29.8 29.1

SBSA

SBSA’s market share movement

%

2013 2014 2015 2016 2017 2018

24.1 24.1 23.4 23.1 22.8 22.3

DepositsOther loans and advances

24.2 24.9 23.4 23.8 21.5 21.8

Card

27.7 27.4 26.9 27.4 27.3 26.1

18.8 17.6 18.7 19.0 18.5 19.0

Vehicle and Asset Finance

0

7

14

21

28

35

30.1 30.3 29.9 30.5 29.8 29.1

Mortgage loans

1 Source: SARB BA 900.2 Mortgage lending includes residential, corporate and commercial property finance loans.

88


Other loans and advances

%

2013 2014 2015 2016 2017 2018

Other

20.6 20.3 21.6 19.4 19.0 18.6

Capitec

2.6 2.8 2.9 3.1 3.4 3.5

FirstRand

20.3 22.0 20.8 21.2 22.7 22.7

Nedbank

16.2 14.4 14.7 15.3 14.4 13.4

16.1 15.6 16.6 17.2 19.0 20.0

ABSA

24.2 24.9 23.4 23.8 21.5 21.8

SBSA

0

6

12

18

24

30

Deposits

%

2013 2014 2015 2016 2017 2018

Other

15.5 16.1 17.3 16.4 16.9 16.9

FirstRand

20.2 20.5 20.2 21.0 21.9 21.9

Nedbank

19.0 18.7 18.4 19.0 18.5 19.0

21.2 20.6 20.7 20.5 19.9 19.9

ABSA

24.1 24.1 23.4 23.1 22.8 22.3

SBSA

0

6

12

18

24

30

Corporate priced deposits

%

2013 2014 2015 2016 2017 2018

Other

18.7 18.5 19.9 18.6 18.9 19.2

FirstRand

19.3 19.5 19.0 19.9 21.6 21.4

Nedbank

18.7 18.5 18.1 18.4 17.3 18.3

18.7 18.4 18.7 19.2 18.5 17.8

ABSA

24.6 25.1 24.3 23.9 23.7 23.3

SBSA

0

6

12

18

24

30

Retail priced deposits3

%

2013 2014 2015 2016 2017 2018

Other

11.2 13.9 15.1 16.1 16.5 16.6

FirstRand

21.2 21.1 21.5 21.8 21.8 22.2

Nedbank

19.5 18.9 18.3 18.6 19.0 18.4

23.3 22.2 21.9 21.4 20.7 21.3

ABSA

24.8 23.9 23.2 22.1 22.0 21.5

SBSA

0

6

12

18

24

30

3 Retail priced deposits include households, non-profit organisations serving households and unincorporated business enterprise.

89

Africa Regions legal entitiesRegional income statement

East Africa1 South & Central Africa2 West Africa3 Africa Regions legal entities

CCY Change 2018 2017 CCY Change 2018 2017 CCY Change 2018 2017 CCY Change 2018 2017

% % Rm Rm % % Rm Rm % % Rm Rm % % Rm Rm

Net interest income 10 9 3 681 3 384 8 8 8 063 7 479 10 (7) 6 401 6 880 9 2 18 145 17 743

Non-interest revenue 10 6 2 373 2 241 14 13 5 566 4 904 23 14 5 972 5 246 17 12 13 911 12 391

Net fee and commission revenue 14 9 1 247 1 144 14 13 3 361 2 963 23 13 3 820 3 377 18 13 8 428 7 484

Trading revenue 7 3 1 095 1 060 12 11 2 096 1 884 24 15 2 110 1 837 15 11 5 301 4 781

Other revenue (11) (11) 33 37 85 79 102 57 (34) (41) 19 32 27 22 154 126

Other gains and losses on financial instruments (100) (100) (2) 100 100 7 100 100 23 100 100 28

Total income 10 8 6 054 5 625 10 10 13 629 12 383 16 2 12 373 12 126 12 6 32 056 30 134

Credit impairment charges (34) (35) (340) (525) 14 14 (588) (517) (>100) (>100) 37 (1 198) (59) (60) (891) (2 240)

Loans and advances (33) (34) (344) (525) 0 0 (517) (517) (99) (99) (13) (1 198) (60) (61) (874) (2 240)

Financial investments (100) (100) (81) (100) (100) (16) (100) (100) (97)

Letters of credit, guarantees and other 100 100 4 100 100 10 100 100 66 100 100 80

Income before operating expenses 14 12 5 714 5 100 10 10 13 041 11 866 30 14 12 410 10 928 18 12 31 165 27 894

Operating expenses 6 3 (3 171) (3 080) 11 11 (7 267) (6 566) 17 6 (6 441) (6 076) 12 7 (16 879) (15 722)

Staff costs 3 1 (1 586) (1 566) 8 8 (3 721) (3 447) 20 5 (3 121) (2 972) 11 6 (8 428) (7 985)

Other operating expenses 8 5 (1 585) (1 514) 14 14 (3 546) (3 119) 14 7 (3 320) (3 104) 13 9 (8 451) (7 737)

Net income before non-trading and capital related items, and equity accounted earnings 28 26 2 543 2 020 9 9 5 774 5 300 48 23 5 969 4 852 26 17 14 286 12 172

Non-trading and capital related items (100) (100) 13 (>100) (>100) 6 (38) (>100) (>100) (1) 8 (>100) (>100) 5 (17)

Share of profit from joint ventures >100 >100 3 1 >100 >100 3 1

Profit before indirect taxation 27 25 2 543 2 033 10 10 5 783 5 263 48 23 5 968 4 860 27 18 14 294 12 156

Indirect taxation 8 7 (193) (181) 6 5 (287) (273) 73 55 (90) (58) 14 11 (570) (512)

Profit before direct taxation 29 27 2 350 1 852 10 10 5 496 4 990 48 22 5 878 4 802 27 18 13 724 11 644

Direct taxation 58 55 (680) (439) 14 13 (1 434) (1 267) 12 (3) (945) (975) 21 14 (3 059) (2 681)

Profit for the period 20 18 1 670 1 413 9 9 4 062 3 723 57 29 4 933 3 827 29 19 10 665 8 963

Attributable to non-controlling interests 20 18 (442) (373) (7) (8) (198) (215) 54 24 (1 999) (1 618) 40 20 (2 639) (2 206)

Attributable to ordinary shareholders 20 18 1 228 1 040 10 10 3 864 3 508 60 33 2 934 2 209 26 19 8 026 6 757

Headline adjustable items (100) (100) (7) (>100) (>100) (6) 4 (>100) (>100) 5 (3) (75) (83) (1) (6)

Headline earnings 21 19 1 228 1 033 9 10 3 858 3 512 60 33 2 939 2 206 26 19 8 025 6 751

ROE - invested equity (%) 21.1 16.0 24.5 26.3 30.4 26.0 24.0 23.8

ROE - equity calculated on SARB rules (%) 18.6 15.8 21.2 23.1 33.0 23.2 22.7 21.6

Credit loss ratio (%) 0.93 1.64 0.55 0.58 (0.11) 2.98 0.48 1.38

Credit loss ratio on loans to customers (%) 1.15 1.94 0.88 0.96 (0.20) 4.83 0.72 2.12

Cost-to-income ratio (%) 52.4 54.8 53.3 53.0 52.1 50.1 52.7 52.2

Effective direct taxation rate (%) 28.9 23.7 26.1 25.4 16.1 20.3 22.3 23.0

Effective total taxation rate (%) 34.3 30.5 29.8 29.3 17.3 21.3 25.4 26.31 Kenya, South Sudan, Tanzania, Uganda.2 Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, eSwatini, Zambia, Zimbabwe.3 Angola, DRC, Ghana, Ivory Coast, Nigeria.

90


East Africa1 South & Central Africa2 West Africa3 Africa Regions legal entities

CCY Change 2018 2017 CCY Change 2018 2017 CCY Change 2018 2017 CCY Change 2018 2017

% % Rm Rm % % Rm Rm % % Rm Rm % % Rm Rm

Net interest income 10 9 3 681 3 384 8 8 8 063 7 479 10 (7) 6 401 6 880 9 2 18 145 17 743

Non-interest revenue 10 6 2 373 2 241 14 13 5 566 4 904 23 14 5 972 5 246 17 12 13 911 12 391

Net fee and commission revenue 14 9 1 247 1 144 14 13 3 361 2 963 23 13 3 820 3 377 18 13 8 428 7 484

Trading revenue 7 3 1 095 1 060 12 11 2 096 1 884 24 15 2 110 1 837 15 11 5 301 4 781

Other revenue (11) (11) 33 37 85 79 102 57 (34) (41) 19 32 27 22 154 126

Other gains and losses on financial instruments (100) (100) (2) 100 100 7 100 100 23 100 100 28

Total income 10 8 6 054 5 625 10 10 13 629 12 383 16 2 12 373 12 126 12 6 32 056 30 134

Credit impairment charges (34) (35) (340) (525) 14 14 (588) (517) (>100) (>100) 37 (1 198) (59) (60) (891) (2 240)

Loans and advances (33) (34) (344) (525) 0 0 (517) (517) (99) (99) (13) (1 198) (60) (61) (874) (2 240)

Financial investments (100) (100) (81) (100) (100) (16) (100) (100) (97)

Letters of credit, guarantees and other 100 100 4 100 100 10 100 100 66 100 100 80

Income before operating expenses 14 12 5 714 5 100 10 10 13 041 11 866 30 14 12 410 10 928 18 12 31 165 27 894

Operating expenses 6 3 (3 171) (3 080) 11 11 (7 267) (6 566) 17 6 (6 441) (6 076) 12 7 (16 879) (15 722)

Staff costs 3 1 (1 586) (1 566) 8 8 (3 721) (3 447) 20 5 (3 121) (2 972) 11 6 (8 428) (7 985)

Other operating expenses 8 5 (1 585) (1 514) 14 14 (3 546) (3 119) 14 7 (3 320) (3 104) 13 9 (8 451) (7 737)

Net income before non-trading and capital related items, and equity accounted earnings 28 26 2 543 2 020 9 9 5 774 5 300 48 23 5 969 4 852 26 17 14 286 12 172

Non-trading and capital related items (100) (100) 13 (>100) (>100) 6 (38) (>100) (>100) (1) 8 (>100) (>100) 5 (17)

Share of profit from joint ventures >100 >100 3 1 >100 >100 3 1

Profit before indirect taxation 27 25 2 543 2 033 10 10 5 783 5 263 48 23 5 968 4 860 27 18 14 294 12 156

Indirect taxation 8 7 (193) (181) 6 5 (287) (273) 73 55 (90) (58) 14 11 (570) (512)

Profit before direct taxation 29 27 2 350 1 852 10 10 5 496 4 990 48 22 5 878 4 802 27 18 13 724 11 644

Direct taxation 58 55 (680) (439) 14 13 (1 434) (1 267) 12 (3) (945) (975) 21 14 (3 059) (2 681)

Profit for the period 20 18 1 670 1 413 9 9 4 062 3 723 57 29 4 933 3 827 29 19 10 665 8 963

Attributable to non-controlling interests 20 18 (442) (373) (7) (8) (198) (215) 54 24 (1 999) (1 618) 40 20 (2 639) (2 206)

Attributable to ordinary shareholders 20 18 1 228 1 040 10 10 3 864 3 508 60 33 2 934 2 209 26 19 8 026 6 757

Headline adjustable items (100) (100) (7) (>100) (>100) (6) 4 (>100) (>100) 5 (3) (75) (83) (1) (6)

Headline earnings 21 19 1 228 1 033 9 10 3 858 3 512 60 33 2 939 2 206 26 19 8 025 6 751

ROE - invested equity (%) 21.1 16.0 24.5 26.3 30.4 26.0 24.0 23.8

ROE - equity calculated on SARB rules (%) 18.6 15.8 21.2 23.1 33.0 23.2 22.7 21.6

Credit loss ratio (%) 0.93 1.64 0.55 0.58 (0.11) 2.98 0.48 1.38

Credit loss ratio on loans to customers (%) 1.15 1.94 0.88 0.96 (0.20) 4.83 0.72 2.12

Cost-to-income ratio (%) 52.4 54.8 53.3 53.0 52.1 50.1 52.7 52.2

Effective direct taxation rate (%) 28.9 23.7 26.1 25.4 16.1 20.3 22.3 23.0

Effective total taxation rate (%) 34.3 30.5 29.8 29.3 17.3 21.3 25.4 26.31 Kenya, South Sudan, Tanzania, Uganda.2 Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, eSwatini, Zambia, Zimbabwe.3 Angola, DRC, Ghana, Ivory Coast, Nigeria.

91

Africa Regions legal entities

West Africa�� Increased group shareholding in the Nigerian operations from

53.0% to 65.4%.�� Angola’s performance was driven by strong trading revenue growth

related to the market dislocation and improved yields on government instruments. �� In Angola cost remained tightly controlled despite the high inflation

environment and improved loan book quality.�� In Nigeria macroeconomic conditions remained challenging, with

moderate growth and inflation tempered by a relatively stable exchange rate. The cash reserving ratio remained high, impacting the banks ability to lend.�� Nigeria’s performances was boosted by credit impairment

recoveries.�� Nigeria’s performance was negatively impacted by increased IT

related charges, higher insurance expenses and the exchange control fine imposed on the bank relating to the MTN Nigeria foreign exchange remittances. �� 2018 represents the first full year of operation for the Ivory Coast

business with positive signs in both revenue and volumes.

Balance sheet�� Continued focus has yielded good growth in both the volume and

quality of the loan book however, the impact of IFRS9 has resulted in increased balance sheet impairments. �� The credit loss ratio on loans has improved from 138bps to 48bps,

driven largely by credit recoveries in Angola, Kenya and Nigeria.�� Net interest margin declined slightly year-on-year, driven by

declining interest rate environment in most markets. This was offset by focused client asset growth and growth in our cheaper funding base.�� Despite the impact of IFRS9 on capital and liquidity ratios, all legal

entities remain well capitalised, positioning the franchise for future growth.

East Africa�� Increased group shareholding in the Kenyan operations from 60.0%

to 69.1%.�� Despite the impact of the interest rate cap in Kenya, growth in

customer assets through mobilisation of technology to enhance customer experience, contributed to net interest growth. �� Impairment recoveries on key client as well as improved loan

quality resulted in a reduced credit loss ratio.�� Tanzania’s performance negatively impacted by adverse

macroeconomic conditions, including low private sector credit growth, declining interest rates (at 6-year lows) and regulatory changes which negatively impacted credit impairments.

South & Central Africa�� 10% revenue growth, despite market pressure in the region

including, reduced lending rates, expensive deposits driven by competitive market pricing, regulatory directives on fees as well as liquidity constraints in Botswana and Zimbabwe.�� Regulatory changes in Zambia limiting fees on banking services,

impacted fees in the last quarter of 2018.�� Revenue challenges were offset by growth in local deposits and

investment in high yielding government paper in Mozambique and Zimbabwe, gearing the balance sheet and providing meaningful digital solutions to clients. �� Foreign currency shortages in Zimbabwe led to a significant increase

in electronic transaction volumes, while changes to the regulatory restrictions on platinum and chrome exports contributed to growth in trading revenue.�� Higher impairment charges were largely driven by the adoption of

IFRS9 and the inclusion of financial investments in the stage 1 and 2 debt provision.�� Cost growth was largely driven by higher amortisation in Mauritius,

Malawi and Lesotho from newly implemented core banking systems.

Contribution by business unit to the Africa Regions legal entities total income

Rm

PBB CIB

East Africa1

South & Central Africa2

West Africa3

2017 2018 2017 2018

1 Kenya, South Sudan, Tanzania, Uganda.2 Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, eSwafini, Zambia, Zimbabwe.3 Angola, DRC, Ghana, Ivory Coast, Nigeria.

20 000

15 000

10 000

5 000

0

92


Africa Regions legal entitiesStatement of financial position


% % Rm Rm

AssetsCash and balances with central banks 21 29 50 363 39 188

Derivative assets 22 36 1 819 1 334

Trading assets (28) (19) 15 547 19 298

Pledged assets >100 >100 6 544 2 067

Financial investments 15 16 61 784 53 120

Loans and advances 20 31 190 628 145 348

Loans and advances to banks 25 36 63 408 46 465

Loans and advances to PBB customers 13 22 68 708 56 519

Loans and advances to CIB customers 26 38 58 512 42 364

Other assets 22 31 9 847 7 519

Property and equipment 16 26 5 754 4 556

Goodwill and other intangible assets 2 11 5 893 5 305

Goodwill 6 18 2 144 1 824

Other intangible assets (0) 8 3 749 3 481

Total assets 17 25 348 179 277 735

Equity and liabilitiesEquity 18 28 46 696 36 505

Equity attributable to ordinary shareholders 22 33 38 690 29 139

Equity attributable to non-controlling interest 1 9 8 006 7 366

Liabilities 17 25 301 483 241 230

Derivative liabilities (18) (8) 866 945

Trading liabilities >100 >100 8 921 3 196

Deposits and debt funding 14 21 267 865 221 415

Deposits from banks 3 15 25 723 22 344

Deposits from PBB customers 11 21 92 284 76 192

Deposits from CIB customers 17 22 149 858 122 879

Subordinated debt 24 33 5 083 3 830

Provisions and other liabilities 38 58 18 748 11 844

Total equity and liabilities 17 25 348 179 277 735

93

Standard Bank GroupHeadline earnings and net asset value reconciliation by key legal entity

Headline earningsChange 2018 2017

% Rm Rm

SBSA Group as consolidated into SBG (3) 16 021 16 528

Africa Regions legal entities 19 8 025 6 751

Standard Bank Wealth International 61 1 005 625

Other group entities >100 796 364

Standard Insurance Limited 14 494 432

SBG Securities (61) 76 196

Standard Advisory London 15 75 65

Other1 (>100) 151 (329)

Banking activities 7 25 847 24 268

Other banking interests (26) 418 567

ICBC Standard Bank Plc (40% shareholding) (>100) (74) 152

ICBC Argentina (20% shareholding) 19 492 415

Liberty 11 1 600 1 435

Standard Bank Group 6 27 865 26 2701 Included is the elimination of gains and losses on deemed IFRS treasury shares relating to client trading activities in SBG Securities of R15m (2017: (R236m)).

Net asset valueChange 2018 2017

% Rm Rm

SBSA Group (3) 97 650 100 791

Africa Regions legal entities 33 38 690 29 139

Standard Bank Wealth International 36 5 553 4 069

Other group entities (7) 4 467 4 809

Standard Insurance Limited 14 1 618 1 424

SBG Securities 6 1 431 1 355

Standard Advisory London 5 613 583

Other (44) 805 1 447

Banking activities 5 146 360 138 808

Other banking interests 5 7 852 7 493

ICBC Standard Bank Plc (40% shareholding) 14 6 463 5 653

ICBC Argentina (20% shareholding) (25) 1 389 1 840

Liberty 1 10 849 10 719

Standard Bank Group 5 165 061 157 020

94


95

OTHER INFORMATION 96 Changes in accounting policies and restatements

102 Financial and other definitions

104 Abbreviations and acronyms

Changes in accounting policies and restatements

Adoption of new and amended standards effective for the current financial period The accounting policies are consistent with those reported in the previous year except for of the adoption of the following standards and amendments effective for the current period:

�� IFRS 4 Insurance Contracts (amendment) (IFRS 4), the amendment to applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts introduced two approaches: an overlay approach and a deferral approach. The amended standard will provided all companies that issue insurance contracts the option to recognise in other comprehensive income, rather than profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is issued; and provide companies whose activities are predominantly connected with insurance an optional temporary exemption from applying IFRS 9 until 2021. The entities that defer the application of IFRS 9 will continue to apply the existing financial instruments Standard IAS 39. The amendments to IFRS 4 supplement existing options in the standard that can already be used to address the temporary volatility. The group did not apply the optional temporary exemption of applying IFRS 9 until 2021.

�� IFRS 15 Revenue from Contracts with Customers (IFRS 15), with effect from 1 January 2018, replaces the existing revenue standards and the related interpretations. The standard sets out the requirements for recognising revenue that applies to all contracts with customers (except for contracts that are within the scope of the standards on leases, insurance contracts or financial instruments). The core principle of the standard is that revenue recognised reflects the consideration to which the company expects to be entitled in exchange for the transfer of promised goods or services to the

customer. The standard incorporates a five step analysis to determine the amount and timing of revenue recognition. The group adopted IFRS 15 on 1 January 2018 and, as permitted by IFRS 15, did not restate its comparative financial results. The standard does not apply to revenue associated with financial instruments, and therefore does not impact the majority of the group’s revenue.

�� IFRIC 22 Foreign Currency Transactions and Advance Consideration (IFRIC 22) provides guidance on how to determine the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration in a foreign currency.

The above mentioned standards and interpretation to the IFRS standards, adopted on 1 January 2018, did not effect the group’s previously reported financial results or disclosures and did not impact the group’s results upon transition or the group’s accounting policies.

IFRS 9 Financial Instruments (IFRS 9) with effect from 1 January 2018, replaced IAS 39 Financial Instruments: Recognition and Measurement (IAS 39). IFRS 9 introduced new requirements which included an expected credit loss (ECL) impairment model and new requirements for the classification and measurement of financial assets, refer to page 100 for more detail.

IFRS 9, adopted on 1 January 2018, impacted the group’s results upon transition and materially impacted the group’s accounting policies, refer to page 101 for more detail.

96

STANDARD BANK GROUP ANALYSIS OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 OTHER INFORMATION

Category of financial assets

IAS 39 Financial Instrument measurements and gain and loss presentation policy

IFRS 9 Financial Instrument measurements and gain and loss presentation policy

Held for trading Fair value, with gains and losses arising from changes in fair value (including interest and dividends) recognised in trading revenue.

Fair value through profit or loss - designated

Fair value, with gains and losses recognised in interest income/(other revenue) for all debt/(equity) financial assets.

Fair value gains and losses (including interest and dividends) on the financial asset are recognised in the income statement as part of other gains and losses on financial instruments within non-interest revenue.

Fair value through profit or loss - default

N/A Fair value gains and losses (including interest and dividends) on the financial asset are recognised in the income statement as part of other gains and losses on financial instruments within non-interest revenue.

Amortised cost Amortised cost using the effective interest method with interest recognised in interest income, less any expected credit impairment losses which are recognised as part of credit impairment charges.

Directly attributable transaction costs and fees received are capitalised and amortised through interest income as part of the effective interest rate.

Derecognition gains and losses are recognised in net interest income.

Amortised cost using the effective interest method with interest recognised in interest income, less any expected credit impairment losses which are recognised as part of credit impairment charges.

Directly attributable transaction costs and fees received are capitalised and amortised through interest income as part of the effective interest rate.

Derecognition gains and losses are recognised in other gains and losses on financial instruments within non-interest revenue.

Modification gain or loss within credit impairments (for distressed financial asset modifications) or gains and losses on financial instruments within non-interest revenue (for all other modifications).

Fair value through other comprehensive income (FVOCI)

N/A Debt instrument: Fair value, with gains and losses recognised directly in the fair value through OCI reserve. When a debt financial asset is disposed of, the cumulative fair value adjustments, previously recognised in OCI, are reclassified to the other gains and losses on financial instruments within non-interest revenue. Interest income on a debt financial asset is recognised in interest income in terms of the effective interest rate method. Dividends received are recognised in interest income within profit or loss.

Equity instrument: Fair value, with gains and losses recognised directly in the fair value through OCI reserve. When equity financial assets are disposed of, the cumulative fair value adjustments in OCI are reclassified within reserves to retained income. Dividends received on equity instruments are recognised in other revenue within non-interest income.

Available for sale Fair value, with gains and losses recognised directly in the available-for-sale reserve until the financial asset is derecognised or impaired. Interest income on debt financial assets is recognised in interest income in terms of the effective interest rate method. Dividends received on debt (equity) available-for-sale financial assets are recognised in interest income (other revenue) within profit or loss.

When debt (equity) available-for-sale financial assets are disposed of, the cumulative fair value adjustments in OCI are reclassified to interest income (other revenue).

N/A

97

Interest in suspenseIn addition to the above identified changes between IAS 39 and IFRS 9, interest in suspense (IIS) (refers to contractual interest which accrues on financial assets which are classified as non-performing) is presented as follows:

IAS 39 accounting treatment: Up to 31 December 2017, IAS 18 Revenue required interest income to be recognised only when it was probable that the economic benefits associated with a transaction would flow to the entity. The group, in line with these requirements, suspended the recognition of contractual interest income on all exposures where it was determined that future economic benefits were not probable. The accounting presentation policy for this suspended contractual interest was to present the balance sheet interest in suspense account as part of the gross carrying amount of the financial asset (i.e. gross carrying amount net of IIS). In addition, upon the curing of the non-performing financial asset, the group elected an accounting presentation policy to recognised this suspended contractual interest (previously unrecognised interest) within net interest income line within the income statement. This policy was elected on the basis that the presentation best represented the nature of the amount in terms of IAS 1.

IFRS 9 accounting treatment: IFRS 9 requires that interest income for financial assets classified as stage 3 be calculated on the net carrying amount (after deducting credit impairments), which will result in a portion of contractual interest being suspended. IFRS 9 requires that this suspended contractual interest be presented as part of the financial assets’ gross carrying amount. The group has applied this requirement by presenting balance sheet suspended contractual interest within credit impairments when calculating the financial assets’ net carrying amount. Hence suspended contractual interest does not impact the net carrying amount of the financial asset as presented on the statement of financial position. However, this change in presentation has resulted in an increased gross carrying amount of financial assets and increased credit impairments when compared to IAS 39.

The group has presented previously unrecognised interest earned on curing of a financial asset out of stage 3 within credit impairments. This presentation is consistent with the IFRIC clarification issued in December 2018.

Category of financial liabilities

IAS 39 Financial Instrument measurements and gain and loss presentation policy

IFRS 9 Financial Instrument measurements and gain and loss presentation policy

Held for trading Fair value, with gains and losses arising from changes in fair value (including interest and dividends) recognised in trading revenue.

Fair value through profit or loss - designated

Fair value, with gains and losses arising from changes in fair value (including interest and dividends) recognised in interest expense.

Fair value, with gains and losses arising from changes in fair value (including interest and dividends but excluding fair value gains and losses attributable to own credit risk) are recognised in the other gains and losses on financial instruments as part of non-interest revenue. Fair value gains and losses attributable to changes in own credit risk are recognised within OCI, unless this would create or enlarge an accounting mismatch in which case the own credit risk changes are recognised within trading revenue.

Amortised cost Amortised cost using the effective interest method with interest recognised in interest expense.

Changes in accounting policies and restatements

98


Change in presentation accounting policyExpenses incurred with respect to the group’s customer loyalty programme (UCount) have historically been recorded as part of operating expenses in the income statement. During the year, the group amended its accounting policy for these expenses to rather be recognised as part of net fee and commission revenue (within non-interest revenue and total income). This policy aligns with the group’s policy for other expenses that are recognised within net fee and commission revenue. The impact of the change in the accounting policy on the group’s financial results is as follows:

2017

As previouslypresented

income/(expense) Restatement

Restatedincome/

(expense)

Rm Rm Rm

Net fee and commission revenue 29 133 (463) 28 670

Other operating expenses (25 840) 463 (25 377)

The above restatement had the following effect on key financial statistics:

2017

As previouslyreported Restatement Restated

Non-interest revenue to total income 41.7% (0.2%) 41.5%

Jaws 1.0% 0.1% 1.1%

Cost-to-income 55.7% (0.2%) 55.5%

The impact of the change in the accounting policy on SBSA Group’s financial results is as follows:

2017

As previouslypresented

income/(expense) Restatement

Restatedincome/

(expense)

Rm Rm Rm

Net fee and commission revenue 20 819 (463) 20 356

Other operating expenses in banking activities (18 797) 463 (18 334)

The above restatement had the following effect on key financial statistics:

2017

As previouslyreported Restatement Restated

Non-interest revenue to total income 41.1% (0.4%) 40.7%

Jaws 0.2% 0.1% 0.3%

Cost-to-income 58.6% (0.3%) 58.3%

The change in the accounting policy did not affect the group’s or SBSA’s earnings attributable to ordinary shareholder(s) or headline earnings.

99

BackgroundWith effect from 1 January 2018, IFRS 9 replaced IAS 39. IFRS 9 introduced new requirements which included an expected credit loss (ECL) impairment model and new requirements for the classification and measurement of financial assets as follows:

ECL impairment requirements

IFRS 9’s ECL impairment model’s requirements represented the most material IFRS 9 transition impact for the group.

The ECL model applies to financial assets measured at either amortised cost or at fair value through other comprehensive income (OCI) (FVOCI), loan commitments when there is a present commitment to extend credit (unless these are measured at fair value through profit or loss (FVTPL)) and financial guarantees.

ECL is, at a minimum, required to be measured through a loss allowance at an amount equal to the lower of 12-month or full lifetime ECL of the financial asset. A loss allowance for full lifetime ECL is required for a financial asset if the credit risk of that financial instrument has increased significantly since initial recognition.

Classification and measurement

IFRS 9 requires all financial assets to be classified and measured on the basis of the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.

The accounting for financial assets differs in various other areas to existing requirements such as embedded derivatives and the recognition of fair value adjustments in OCI.

All changes in the fair value of financial liabilities that are designated at FVTPL due to changes in own credit risk are required to be recognised within OCI.

Adoption of IFRS 9The group retrospectively adopted IFRS 9 on 1 January 2018 with an adjustment to the group’s opening 1 January 2018 reserves and, as permitted by IFRS 9, did not restate its comparative financial results. Accordingly, the group’s previously reported financial results up to 31 December 2017 are presented in accordance with the requirements of IAS 39.

IFRS 9’s classification and measurement requirements resulted in an immaterial impact to the group.

IFRS 9’s ECL requirements The most material IFRS 9 transition impact for the group is that of IFRS 9’s new ECL requirements which results in the earlier recognition of credit impairment provisions primarily as a result of the drivers outlined in the table below. This impact was solely as a result of the adoption of IFRS 9 and is not as a result of changes in the credit quality of the group’s loan exposures.

12-month ECL for performing loans (stage 1)

IFRS 9 contains a minimum 12-month ECL for exposures for which there has not been a significant increase in credit risk (SICR) whereas IAS 39 required credit impairments to be recognised only following the identification of objective evidence of impairment.

Significant increase in credit risk (SICR) (stage 2)

A lifetime ECL is recognised for all exposures for which there has been SICR, being a material change in the probability of default, since origination.

Off-balance sheet exposuresIFRS 9’s scope includes off-balance sheet exposures, such as unutilised loan commitments, guarantees and letters of credit.

Life time model work out requirement

In terms of determining ECL for stage 1 and 2 being exposures where there is a probability of default, the potential loss from a lifetime perspective is considered, which would include the probability of recovery post default and subsequent re-default. For stage 3 exposures, being exposures that are either in default or where default is imminent, this would include consideration of cures and subsequent re-default.

Forward looking economic expectations

IFRS 9 requires an adjustment for forward looking economic expectations in the determination of SICR and in the measurement of the ECL

IFRS 9 Financial Instruments

100


IFRS 9 key financial impacts

Table 1: Impact on the group’s summarised statement of financial position on 1 January 2018

Group IAS 39 at

31 December 2017

Rm

IFRS 9 transition adjustment at 1 January 2018

Group IFRS 9at 1 January

2018Rm

IFRS 9 ECL Rm

IFRS 9classification

andmeasurements

RmTotal

Rm

Assets

Financial investments 533 314 (272) 32 (240) 533 074

Loans and advances 1 048 027 (7 839) (83) (7 922) 1 040 105

Interest in associates and joint ventures 9 665 (53) (3) (56) 9 609

Other assets 436 922 2 234 94 2 328 439 250

Total assets 2 027 928 (5 930) 40 (5 890) 2 022 038

Equity 190 017 (6 276) (361) (6 637) 183 380

Equity attributable to ordinary shareholders 157 020 (5 930) (331) (6 261) 150 759

Equity attributable to other equity holders 9 047 9 047

Equity attributable to non-controlling interest 23 950 (346) (30) (376) 23 574

Liabilities 1 837 911 346 401 747 1 838 658

Total equity and liabilities 2 027 928 (5 930) 40 (5 890) 2 022 038

Table 2: Impact on the group’s summarised statement of changes in equity on 1 January 2018

Group IAS 39at

31 December2017

Rm

IFRS 9transition

adjustmentat 1 January

2018Rm

Group IFRS 9at 1 January

2018Rm

Ordinary share capital and share premium 18 063 18 063

Retained earnings 144 539 (5 302) 139 237

Statutory credit risk reserve 3 089 (948) 2 141

Other (8 671) (11) (8 682)

Total ordinary shareholder's equity 157 020 (6 261) 150 759

Other equity instruments 9 047 9 047

Non-controlling interest 23 950 (376) 23 574

Total equity 190 017 (6 637) 183 380

12.0

12.5

13.0

13.5

14.0

■

■

■

%

Impact of IFRS 9 on common equity tier 1 on 1 January 2018

CET 1 ratio – IAS 39

Release of ECL shortfall to credit

provisions

IFRS 9 transition

adjustment

Impact due to existing

threshold deduction

Deferred tax asset impact –

threshold deduction

CET 1 ratio – IFRS 9

(fully loaded)

Capital phase-in

CET 1 ratio – IFRS 9

(after phase-in)

IFRS 9 capital driver

13.5

0.2 (0.6)

(0.1) (0.2)

12.8

0.5 13.3

101

Financial and other definitions

Standard Bank GroupCommon equity tier 1 capital adequacy ratio (fully loaded) (%) #

Common equity tier 1 regulatory capital, including unappropriated profit, as a percentage of total risk-weighted assets, before the adjustment for the SARB 3-year phase-in provision.

Common equity tier 1 capital adequacy ratio (phase-in) (%) #

Common equity tier 1 regulatory capital, including unappropriated profit, as a percentage of total risk-weighted assets, after the adjustment for the SARB 3-year phase-in provision.

Common equity tier 1 capital adequacy ratio (%)* Common equity tier 1 regulatory capital as a percentage of total risk-weighted assets.

Constant currency (%) Comparative financial results adjusted for the difference between the current and prior year cumulative average exchange rates.

Consumer price index A South African index of prices used to measure the change in the cost of basic goods and services.

Diluted headline earnings per ordinary share (cents) Headline earnings divided by the weighted average number of shares, adjusted for potential dilutive ordinary shares.

Dividend cover (times) Headline earnings per share divided by dividend per share.

Dividend payout ratio (%) Dividend per share divided by headline earnings per share.

Dividend per share (cents) Dividends declared to ordinary shareholders divided by weighted average number of shares.

Earnings per share (cents) Profit attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue.

Headline earnings (Rm) Determined by excluding from reported earnings specific separately identifiable remeasurements net of related tax and non-controlling interests.

Headline earnings per ordinary share (cents) Headline earnings divided by the weighted average number of ordinary shares in issue.

Net asset value (Rm) Equity attributable to ordinary shareholders.

Net asset value per share (cents) Net asset value divided by the number of ordinary shares in issue at the end of the period.

Profit attributable to ordinary shareholders (Rm) Profit for the period after distributions to non-controlling interests and other equity instrument holders.

Profit for the period (Rm) Profit for the period attributable to ordinary shareholders, before

non-controlling interests and other equity instrument holders.

Return on equity (%) Headline earnings as a percentage of monthly average ordinary shareholders’ equity.

Shares in issue (number) Number of ordinary shares in issue listed on the JSE.

Structured entity Entities created to accomplish a narrow and well-defined objective.

Tangible net asset value (Rm) Equity attributable to ordinary shareholders, excluding goodwill and other intangible assets.

Tangible net asset value per share (cents) Tangible net asset value divided by the number of ordinary shares in issue at the end of the period.

Tier 1 capital adequacy ratio (%) Tier 1 regulatory capital as a percentage of total risk-weighted assets.

Total capital adequacy ratio (fully loaded) (%) # Total regulatory capital, including unappropriated profit, as a percentage of total

risk-weighted assets, before the adjustment for the SARB 3-year phase-in provision.

Total capital adequacy ratio (phase-in) (%) # Total regulatory capital, including unappropriated profit, as a percentage of total

risk-weighted assets, after the adjustment for the SARB 3-year phase-in provision.

Total capital adequacy ratio (%)* Total regulatory capital as a percentage of total risk-weighted assets.

Tutuwa Tutuwa is the group’s black economic empowerment ownership initiative entered into in terms of the Financial Sector Charter.

Weighted average number of shares (number) The weighted average number of ordinary shares in issue during the period as listed on the JSE.

Definitions marked with # are IFRS 9 and relate to 2018 only. Definitions marked with * are IAS 39 specific and relate to 2017 only. All other definitions relate to all financial years presented.

102


Banking activitiesAvailable financial resources (Rm) The amount of permanent capital that is available to the group to absorb potential losses.

Cost-to-income ratio (%) Operating expenses as a percentage of total income after revenue sharing agreements with group companies but before credit impairments.

Credit loss ratio (%)# Total income statement impairment charges on loans and advances, as a percentage of average daily and monthly gross loans and advances, excluding interest in suspense.

Credit loss ratio (%)* Total income statement impairment charges on loans and advances, as a percentage of average daily and monthly gross loans and advances.

Economic capital coverage ratio (times) Available financial resources divided by minimum economic capital requirements.

Effective direct taxation rate (%) Direct taxation as a percentage of net income before direct taxation.

Effective total taxation rate (%) Direct and indirect taxation as a percentage of net income before taxation.

Interest in suspense (Rm)# Contractual interest on loans that have been classified as stage 3 and cannot be recognised in terms of IFRS 9.

Jaws (%) Total income growth minus total operating expenses growth.

Loan-to-deposit ratio (%) Net loans and advances as a percentage of deposits and debt funding.

Net interest margin (%) Net interest income as a percentage of average interest earning assets.

Interest earnings assets (Rm) Net loans and advances, financial investments and cash and cash balances.

Non-interest revenue to total income (%) Non-interest revenue as a percentage of total income.

Performing loans credit impairments (Rm)# Impairment for latent losses inherent in groups of loans and advances that have not yet been classified as non-performing.

Risk-weighted assets (Rm) Determined by applying prescribed risk weightings to on-balance sheet and off-balance sheet exposures according to the relative risk of the counterparty.

Non-performing loan credit impairments (Rm)# Impairment for credit impaired (stage 3) loans, net of the present value of estimated recoveries.

Non-performing loan impairment coverage (%)# Balance sheet (BS) impairments for credit impaired loans (NPL) and off-balance sheet credit impaired exposures (O/BS) including interest in suspense (IIS), as a percentage of gross non-performing loans and advances (including IIS).

Non-performing loans (Rm)* Those loans for which:�� The group has identified objective evidence of default, such as a breach of a material loan

covenant or condition, or

�� Instalments are due and unpaid for 90 days or more.

Non-performing loans (Stage 3) (Rm)# Credit exposures that are either in default or where default is imminent. There is a rebuttable presumption that the default does not occur later than when a financial asset is 90 days past due.

Performing loans (Stage 1 and Stage 2) (Rm)# Performing loans include credit exposures classified as follows:�� Credit exposures for which there has been no default event and for which the credit risk has

not significantly increased since recognition.

�� Credit exposures for which the credit risk has increase significantly since recognition, unless the credit risk is low in which case it remains classified as stage 1.

Total impairment coverage ratio (Rm)# Total loans and advances balance sheet impairments as a percentage of gross loans and advances.

Definitions marked with # are IFRS 9 and relate to 2018 only. Definitions marked with * are IAS 39 specific and relate to 2017 only. All other definitions relate to all financial years presented.

103

Abbreviations and acronyms

AT1 Additional Tier 1

BEE Black economic empowerment

CAGR Compound annual growth rate

CASA Current and savings accounts

CCY Constant currency change

CIB Corporate & Investment Banking

CLR Credit loss ratio

ECL Expected credit loss

EPS Earnings per share

FIC Fixed income and currencies

HQLA High quality liquid assets

IAS International Accounting Standards

ICBC Industrial and Commercial Bank of China Limited

ICBCS ICBC Standard Bank Plc

IFRIC International Financial Reporting Interpretations Committee

IFRS International Financial Reporting Standards

IMF International Monetary Fund

JSE Johannesburg Stock Exchange

LCR Liquidity coverage ratio

MSCI Morgan Stanley Capital International

NAFEX Nigerian Autonomous Foreign Exchange Fixing

NCD Negotiable certificates of deposits

NII Net interest income

NIM Net interest margin

NIR Non-interest revenue

NPL Non-performing loans

NSFR Net stable funding ratio

PBB Personal & Business Banking

PDs Probability of defaults

PIM Principal Investment Management

Rand South African Rand

REIT Real Estate Investment Trust

ROE Return on equity

RoRWA Return on risk-weighted assets

RWA Risk-weighted assets

SA South Africa

SARB South African Reserve Bank

SBG Standard Bank Group Limited

SBSA The Standard Bank of South Africa Limited and its subsidiaries

SIP Shareholder Investment Portfolio

The group The Standard Bank Group Limited

UK United Kingdom

US United States

VAF Vehicle and Asset Finance

ZAR South African Rand

104


105

SHAREHOLDER INFORMATION 106 Analysis of shareholders

107 Credit ratings

108 Dividends and payment dates

ibc Contact details

Analysis of shareholders

Ten major shareholders1

2018 2017

Number ofshares

(million)%

holding

Number ofshares

(million)%

holding

Industrial and Commercial Bank of China 325.0 20.1 325.0 20.1

Government Employees Pension Fund (PIC) 199.7 12.3 199.6 12.3

Allan Gray Balanced Fund 29.7 1.8 27.8 1.7

Alexander Forbes Investments (prev. Investment Solutions) 25.8 1.6 28.3 1.8

Old Mutual Life Assurance Company 23.8 1.5 19.7 1.2

Vanguard Emerging Markets Stock Index Fund 22.1 1.4 23.8 1.5

GIC Asset Management 21.0 1.3 18.3 1.1

Vanguard Total International Stock Index Fund 19.4 1.2 16.5 1.0

Dimensional Emerging Markets Value Fund 16.8 1.0 17.1 1.1

Government of Norway 14.8 0.9 9.6 0.6

698.1 43.1 685.7 42.41 Beneficial holdings determined from the share register and investigations conducted on our behalf in terms of section 56 of the Companies Act, 71 of 2008.

Geographic spread of shareholders 2018 2017

Number of shares

(million)%

holding

Number ofshares

(million)%

holding

South Africa 785.1 48.5 759.6 46.9

Foreign shareholders 833.4 51.5 859.7 53.1

China 325.9 20.1 325.2 20.1

United States of America 240.3 14.8 252.9 15.6

United Kingdom 39.0 2.4 63.7 3.9

Singapore 24.0 1.5 22.8 1.4

Namibia 19.6 1.2 22.5 1.4

Netherlands 15.6 1.0 15.0 0.9

Norway 15.4 1.0 10.3 0.6

Japan 15.0 0.9 13.7 0.8

Ireland 13.3 0.8 20.9 1.3

United Arab Emirates 12.2 0.8 7.8 0.5

Hong Kong 12.0 0.7 10.8 0.7

Canada 11.0 0.7 10.5 0.6

Saudi Arabia 10.4 0.6 8.4 0.5

Luxembourg 10.3 0.6 11.0 0.7

Other 69.4 4.4 64.2 4.1

1 618.5 100.0 1 619.3 100.0

106

STANDARD BANK GROUP ANALYSIS OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 SHAREHOLDER INFORMATION

Credit ratings

Ratings as at 6 March 2019 for key banking entities within Standard Bank Group:Short-term Long-term Outlook

Standard Bank Group LimitedFitch Ratings

Foreign currency issuer default rating B BB+ Stable

Local currency issuer default rating BB+ Stable

National rating F1 + (ZAF) AA (ZAF) Stable

Moody's Investor Services

Issuer rating Ba1 Stable

The Standard Bank of South AfricaFitch Ratings


Local currency issuer default rating BB+ Stable

National rating F1 + (ZAF) AA (ZAF) Stable


Foreign currency deposit rating P-3 Baa3 Stable

Local currency deposit rating P-3 Baa3 Stable

National rating P-1.za Aa1.za

RSA SovereignFitch Ratings


Local currency issuer default rating B BB+ Stable


Foreign currency rating P-3 Baa3 Stable

Local currency rating Baa3 Stable

Standard & Poor's

Foreign currency B BB Stable

Local currency B BB+ Stable

National rating zaA-1+ zaAAA

Stanbic IBTC Bank PlcFitch Ratings

National rating F1 + (NGA) AAA (NGA)

Standard & Poor's

Foreign currency B B Stable

National rating ngA-2 ngBBB

Stanbic Bank KenyaFitch Ratings

Issuer default rating B BB- Stable

National rating F1 + (KEN) AAA (KEN) Stable

107

Dividends and payment dates

The relevant dates for the payment of dividends are as follows:

Ordinary shares

6.5%cumulative

preference shares (First preference shares)

Non-redeemable, non-cumulative,

non-participating preference shares

(Second preference shares)1

JSE Limited

Share code SBK SBKP SBPP

ISIN ZAE000109815 ZAE000038881 ZAE000056339

Namibian Stock Exchange (NSX)

Share code SNB

ISIN ZAE000109815

Dividend number 99 99 29

Gross distribution/dividend per share (cents) 540.0 3.25 390.22

Last day to trade in order to be eligible for the cash dividend Tuesday, 9 April 2019 Tuesday, 2 April 2019 Tuesday, 2 April 2019

Shares trade ex the cash dividend Wednesday, 10 April 2019 Wednesday, 3 April 2019 Wednesday, 3 April 2019

Record date in respect of the cash dividend Friday, 12 April 2019 Friday, 5 April 2019 Friday, 5 April 2019

Dividend cheques posted and CSDP/broker account credited/updated (payment date) Monday, 15 April 2019 Monday, 8 April 2019 Monday, 8 April 2019

1 Dividends paid on SBPP are calculated as 77% of the average prime interest rate over the relevant period.

Ordinary share certificates may not be dematerialised or rematerialised between Wednesday, 10 April 2019, and Friday, 12 April 2019, both days inclusive.

Preference share certificates (first and second) may not be dematerialised or rematerialised between Wednesday, 3 April 2019 and Friday, 5 April 2019, both days inclusive.

108

STANDARD BANK GROUP ANALYSIS OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 SHAREHOLDER INFORMATION

Contact detailsStandard Bank Group LimitedRegistration No. 1969/017128/06Incorporated in the Republic of South AfricaWebsite: www.standardbank.com

Investor relations Sarah Rivett-CarnacTel: +27 11 631 6897

Group secretary Zola StephenTel: +27 11 631 9106

Group financial director Arno DaehnkeTel: +27 11 636 3756

Registered address 9th FloorStandard Bank Centre5 Simmonds StreetJohannesburg, 2001

PO Box 7725Johannesburg, 2000

Head office switchboard Tel: +27 11 636 9111

Transfer secretaries in South Africa Computershare Investor Services Proprietary LimitedRosebank Towers15 Biermann AveRosebank, 2196

PO Box 61051Marshalltown, 2107

Transfer secretaries in Namibia Transfer Secretaries (Proprietary) Limited4 Robert Mugabe Avenue(Entrance in Burg Street)Windhoek

PO Box 2401Windhoek

www.standardbank.com

Please direct all customer queries and comments to:[email protected]

Please direct all shareholder queries and comments to:[email protected]

109

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